PTI: Markets regulator SEBI has suggested the concept of blue bonds as a mode of sustainable finance, saying such securities can be utilised for various blue economy-related activities, including oceanic resource mining and sustainable fishing.
Also, the watchdog has suggested strengthening the framework for green bonds by amplifying the definition of green debt securities and enhancing disclosures, according to a consultation paper.
The proposals are aimed at aligning with the updated Green Bond Principles (GBP) published by the International Capital Market Association (ICMA).
Since the framework of green debt securities was laid down by the SEBI, there have been multiple events in the sustainable finance space around the world, thereby necessitating a review in the Indian context, as per the consultation paper issued on Thursday, reported Press Trust of India.
“India has tremendous scope for deployment of blue bonds in various aspects of the blue economy” like oceanic resource mining, sustainable fishing, national offshore wind energy policy and in the area of blue flag beach eco-tourism model that provide the tourists clean and hygienic bathing water facilities, it said.
India has a 7,500 km-long coastline and 14,500 kms of navigable inland waterways, and the blue economy comprises 4.1 per cent of India’s economy, SEBI said.
SEBI framework defines Green Debt Securities (GDS) as debt securities issued for raising funds that are to be utilised for projects or assets falling under certain categories.
The regulator has suggested that the issuer should inform investors about the intended types of temporary placement for the balance of unallocated net proceeds. Also, the utilisation of proceeds from each issue of GDS made by an issuer should be tracked and disclosed separately.
In addition, the issuer should disclose any taxonomies, green standards or certifications, if referenced in the project selection.
As per SEBI, the issuers should disclose information pertaining to reporting of the environmental impact of the projects financed by the green debt securities. This will enable investors to gather information pertaining to the impact of the project on the environment, it added.