Abstract:

In view of financing India’s ongoing energy transition, the bond market could be a critical source of debt finance for the energy transition. Identifying this potential, this report presents a detailed analysis of the case for green bonds as a complementary source of debt capital. The report considers green bonds as a tool to address the capital raising needs of both the private sector, as well as state governments for the renewable energy and electric mobility sectors. For the mobility sector, the report identifies the acquisition of EVs by state transport undertakings, the deployment of public charging infrastructure, and investments in setting up EV manufacturing clusters as the range of end uses for green bond proceeds by states. The existence of technical feasibility studies for electric buses, current and planned on-road EV deployments, and the scale of private sector investments in EV manufacturing have been identified as determinants of the attractiveness of the EV ecosystem in a state. The report also presents a toolkit (section 6.4) for prospective green bond issuers. The toolkit provides a step-by-step guide of the green bond issuance process, in order to facilitate operationalisation of the intent to issue green bonds for state governments.