Ease of Doing Business for MSMEs: India’s sovereign green bond for environment-friendly projects may be used to finance energy efficiency schemes for small and medium businesses among other clean energy schemes as per a report by Mint.
Schemes related to the viability gap funding for battery storage and equity support for hydropower projects in the North-East could also come under the purview of the sovereign green bond.
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The Ministry of Power is planning to propose these schemes for the allocation under the Rs 16,000 crore green bonds, said the report, citing two government officials. The schemes will be selected after examining their potential to reduce carbon emissions and the economy’s greenhouse emissions.
“In the first tranche, a total of Rs 16,000 crore under green finance bonds is to be made available to all ministries. The proposal to include viability gap funding scheme for battery storage, MSMEs energy efficiency schemes, and equity support scheme for the north-eastern states’ hydropower projects in the first tranche is in the works,” said one of the two government officials who didn’t want to be named.
For the fact that micro, small and medium enterprises (MSMEs) have a significant share in the economy, the government is also considering improving energy intensity in industries and promoting clean technology usage in them, the report added.
Besides, viability gap funding that supports infrastructure projects can give a push to the country’s infrastructure-creation plans through public-private partnerships. Also, the electricity storage business is expected to be a significant part of the energy transition, the report said.
In the power sector, large battery storages that store electricity in the form of chemical or electrochemical energy and re-convert it to electricity can help power India’s electricity grids, considering the intermittent nature of electricity from clean energy sources.
Additionally, India is working on a State Energy Efficiency Action Plan consisting of sector-wise energy efficiency targets whose final action plan will be released in December.
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In the Union budget for the financial year 2022-2023, the government announced the plan to sell sovereign bonds to fund green infrastructure. The government’s borrowing for the second half, estimated to be Rs 5.92 trillion includes the Rs 16,000 crore sovereign green bond offering, the report said.
With the help of these initiatives, India could put forward some compelling green energy credentials in the UN Climate Change Conference scheduled for November in Egypt.