STUDENT UNDERTAKING

This is to certify that I have completed the Project titled” GREEN FINANCE

AND ECONOMIC DEVELOPMENT OF A COUNTRY “under the guidance of

“(MR. ASHISH MANCHANDA)” in partial fulfilment of the requirement for the

award of degree of Master of Business Administration at University School

of Management Studies, GGSIP University, Dwarka, New Delhi. This is an

original piece of work and has not been submitted elsewhere.

PALLAV TYAGI
01016659421
 Certificate
TO WHOMSOEVER IT MAY CONCERN

This is to certifythat the Project Report, titled “GREEN

FINANCE AND ECONOMIC DEVELOPMENT OF A COUNTRY” is

submitted by ‘PALLAV TYAGI’ roll no ‘01016659421’ under

my guidance, in partial fulfillment of the award of the
degree of Master of Business Administration (2021-23).

MR. ASHISH MANCHANDA

Professor

University School of Management Studies,

G.G.S.I.P. University
 Acknowledgement

With immense pleasure and gratitude, I am presenting “GREEN

FINANCE AND ECONOMIC DEVELOPMENT OF A COUNTRY”

project report as part of the curriculum of ‘Master of Business

Administration’. I wish to thank all the people who gave me

unending support.

I express my profound thanks to MR. ASHISH MANCHANDA,

project guide and to all those who have indirectly guided and

helped me in preparation of this project.

I also like to extend my gratitude to all my friends and colleagues

who provided moral support and a much-needed inspiration to

conclude the project in time and a special thanks to my parents

who are an integral part of the success of this project.

 INTRODUCTION
Up to today, we do not have a precise and commonly accepted definition of green finance for
two reasons. First, many publications do not try to define the term – for instance neither IFC
(2013) nor Spratt and Griffith-Jones (2013) include a definition of green finance – and
second, the definitions that are proposed vary significantly. Among the few definitions that
can be found in the literature are the following:
● Höhne / Khosla / Fekete / Gilbert (2012): "Green finance is a broad term that can refer
to financial investments flowing into sustainable development projects and initiatives,
environmental products, and policies that encourage the development of a more
sustainable economy. Green finance includes climate finance but is not limited to it. It
also refers to a wider range of „other environmental objectives, for example industrial
pollution control, water sanitation, or biodiversity protection. Mitigation and
adaptation finance is specifically related to climate change related activities:
mitigation financial flows refer to investments in projects and programs that
contribute to reducing or avoiding greenhouse gas emissions (GHGs) whereas
adaptation financial flows refer to investments that contribute to reducing the
vulnerability of goods and persons to the effects of climate change."

● Zadek and Flynn (2013): "Green finance is often used interchangeably with green
investment. However, in practice, green finance is a wider lens including more than
investments as defined by Bloomberg New Energy Finance and others. Most
important is that it includes operational costs of green investments not included under
the definition of green investment. Most obviously, it would include costs such as
project preparation and land acquisition costs, both of which are not just significant
but can pose distinct financing challenges."

● Pricewaterhouse Coopers Consultants (PWC) (2013): "For the banking sector, green
finance is defined as financial products and services, under the consideration of
environmental factors throughout the lending decision making, ex-post monitoring
and risk management processes, provided to promote environmentally responsible
investments and stimulate low-carbon technologies, projects, industries and
businesses."1

GREEN FINANCE

1 (Dr. Nannette Lindenberg, 2014), Definition of Green Finance, German Development Institute.
Green finance or sustainable finance is the set of financial regulations,
standards, norms and products that pursue an environmental objective, and in
particular to facilitate the energy transition. It allows the financial system to
connect with the economy and its populations by financing its agents while
maintaining a growth objective.2
Green finance refers to the financial arrangements that are specific to the use for
projects that are environmentally sustainable or projects that adopt the aspects
of climate change. Environmentally sustainable projects include the production
of energy from renewable sources like solar, wind, biogas, etc.; clean
transportation that involves lower greenhouse gas emission; energy efficient
projects like green building; waste management that includes recycling, efficient
disposal and conversion to energy, etc. Moreover, project defined sustainable
under the disclosure requirement for Green Debt Securities include climate
change adaptation, sustainable waste and water managements, sustainable land
use including sustainable forestry and agriculture, and biodiversity conservation
(SEBI 2017). In order to meet the financial needs for these types of projects,
new financial instruments such as green bonds; carbon market instruments (e.g.
carbon tax); and new financial institutions (e.g. green banks and green funds)
are being established. They together constitute green finance.
Green finance is central to the overall discussion on sustainability of economic
growth. Rapid economic development is often achieved at the cost of
environment. Dwindling natural resources, degraded environment and rampant
pollution are hazardous to public health and pose challenges to the sustainable
economic growth. In order to protect and substantially improve the
environment, nations around the world have been increasingly focusing on the
use of eco- friendly technologies. However, it requires appropriate incentive
structure for increased allocation of funds towards setting up or adopting
environmentally sustainable projects. Once funds are freed from the
conventional industries and are channelled into the green and environment-
friendly sectors, other resources including land and labour may also follow. This
eventually leads to an optimal allocation of resources that support sustainable
growth in the long run. In order to achieve these objectives, targeted policies on
green finance have been formed in major countries involving all stakeholders of
economic growth, viz., corporates, governments and central banks.3

Proposal of a definition of green finance:4

2 Article on Wikipedia, Sustainable finance, Edited on 7 th June , 2022.

3
4 (Dr. Nannette Lindenberg, 2014), Definition of Green Finance, German Development Institute.
Green finance comprises
the financing of public and private green investments (including
preparatory and capital costs) in the following areas
o environmental goods and services (such as water manage mentor
protection of biodiversity and landscapes)
o prevention, minimization and compensation of damages to the
environment and to the climate (such as energy efficiency or dams)
the financing of public policies (including operational costs) that
encourage the implementation of environmental and environmental-
damage mitigation or adaptation projects and initiatives (for example
feed-in-tariffs for renewable energies)
components of the financial system that deal specifically with green
investments, such as the Green Climate Fund or financial instruments
for green investments (e.g. green bonds and structured green funds),
including their specific legal, economic and institutional framework
conditions
 TYPES OF GREEN FINANCING

1). Green Bonds

A green bond is a type of fixed-income instrument that is specifically
earmarked to raise money for climate and environmental projects.
These bonds are typically asset-linked and backed by the issuing
entity's balance sheet, so they usually carry the same credit rating as
their issuers’ other debt obligations.

Dating back to the first decade of the 21st century, green bonds are
sometimes referred to as climate bonds, but the two terms are not
always synonymous.

● A green bond is a fixed-income instrument designed specifically

to support specific climate-related or environmental projects.
● Green bonds may come with tax incentives to enhance their
attractiveness to investors.
● The World Bank is a major issuer of green bonds. It has issued
164 such bonds since 2008, worth a combined $14.4 billion.
● The phrase "green bond" is sometimes used interchangeably
with climate bonds or sustainable bonds.
2). Renewable and Sustainable Equity
This type of financing is for homeowners and businesses. The most
common example is solar power. By setting up solar panels on your
home, you can receive tax credits or cash payments in return for the
power generated by your solar panels. The benefit of this option is
that it is stable and guaranteed over a 20-year timescale.
The financing that you receive will likely go to the capital costs
associated with installing the solar panels.

3). Green Mutual Funds

This type of green finance is similar to regular mutual funds, but it
invests in companies that provide goods and services that are
environmentally friendly.
Conventional mutual funds do not necessarily consider the
environment when they make investment decisions, which means
green investments are growing in popularity.
A green fund is a mutual fund or another investment vehicle that will
only invest in companies that are deemed socially conscious or
directly promote environmental responsibility. A green fund can come
in the form of a focused investment vehicle for companies engaged in
environmentally supportive businesses, such as alternative energy,
green transport, water and waste management, and sustainable living.
● Green funds are mutual funds or other types of investment
vehicles that promote socially and environmentally conscious
policies and business practices.
● Green funds might invest in companies engaged in green
transportation, alternative energy, and sustainable living.

4). Solar Bonds

These types of green finance cannot be bought with cash, but instead must
be purchased with green energy credits. A business owner can receive 2-
4% on their investment depending on the company offering the bond and
its history.
5). Green Mortgages
In the United States, only homeowners with existing traditional loans can
take advantage of these types of green finance. They may save money by
utilizing forms of renewable energy like solar panels, which are offered
through various kinds of green financing.
A regular mortgage will pay off standard types of loans early, and it may
even help you qualify for alternative types of green financing with 0%
interest.

6). Green Credit Cards

Waste Management powers its green finance through green credit cards,
which earn additional rewards for green financing for every dollar spent
with Waste Management.
If you spend a decent amount of capital on green projects each month, this
option could be worth looking into.
7). Green Stocks
If you already invest in various types of green finance, it’s easiest to
purchase this type. You’ll receive diverse sorts of green financing at the
same kinds of investments as your other forms of finance.
However, if you don’t already have any types of green finance, you can
easily discover them among the many companies that appeal to you.
 OBJECTIVES
(“Sustainable Development Goals and Green Financing”, n.d.) - The
purpose of green financing, as stated by the UN Environment Programme, is to
increase the level of financial flows (from banking, micro-credit, insurance and
investment) from the public, private and not-for-profit sectors to sustainable
development priorities. The aim is to align financial systems, working with
countries, financial regulators and financial sectors, and direct capital allocation
to sustainable development that will shape the production and consumption
patterns of tomorrow. Financial mechanisms such as Green Bonds, Social
Bonds and ESG Linked Loans help this alignment as they promote public-
private partnerships for sustainable development.

1. No Poverty : As per 2019 enumeration, 85% of world’s population

subsist on less than $30 a day, two-thirds populate on less than $10 a day,
and 10% survive on less than $1.90 per day - this proportion implies
“extreme poverty”. Primary goal of Green Financing is a sustainable
development to terminate poverty in its every form - everywhere.

Since 2015, China is heeding focused surveillance towards poverty

alleviation. Poverty alleviation is a combination of economic and
humanitarian measures that are intended to enable the poor to create
wealth independently as a channel of lifting out of poverty forever.

China has adopted measures towards poverty reduction that are

diversified in different dimensions of financial development, economic
development and social environmental development and achieved its aim
of poverty reduction at the end of 2020. In 2021, China declared its first
centenary goal of building a moderately prosperous society in all respects
and achieved world-recognised attainments, not only benefiting the
Chinese people but also benefiting the whole world.

2. Zero Hunger : Food systems are the aggregation of actors and

interactions along the food value chain starting from guided supply and
production of crops, livestock, and other agricultural products to
transportation, processing, retailing, wholesaling, and preparation of
foods to consumption and disposal. As per UN, these food systems should
run well concerning the achievement of Sustainable Development Goals
(SDGs) by 2030.
 So far advancement toward SDGs and its key measures, ending hunger by
2030, has slackened in recent years in middle of conflicts, climate shocks,
and the COVID-19 widespread.

(Díaz 2021) : $15 billion annual increase in international development

funds—about double the current level—would be dedicated to
agricultural and rural development, food and nutrition security, and
environmental aspects of food systems. Two billion dollars of that
amount would be allocated to support the Zero Hunger Alliance & Fund,
with an additional $500 million coming from private funds. Developed
countries could also use a percentage of their holdings of the new issuing
of Special Drawing Rights (SDRs) in the IMF to create a fund to
guarantee a new “zero hunger bond,” and perhaps “zero hunger green
bonds.” Using the SDRs to guarantee zero hunger bonds (as perpetual
bonds with a floating interest rate capped at an agreed maximum) would
multiply the impact of the SDR funds several times over, while also
contributing to a specific humanitarian objective and addressing
important environmental goals.

(Díaz 2021) : Government outlays in developing countries (excluding

China) total some $3.7 trillion, but only $86 billion is now directed to
agriculture, forestry, and fishing, and about $260 billion for social
assistance. Compared to other regions, developing countries in Africa and
Asia (again excluding China) devote comparatively fewer resources to
those crucial interventions.

3. Good Health and Well Being : Healthcare industry is recognised as one

of the largest industries worldwide. Health funding is a key procedure of
health systems and a core element in the enablement of countries to
access universal health coverage. United Nations Development
Programme(UNDP) coordinates with allies to encourage investment
strategies, national policies and regulatory frameworks to build up
financing and public financial management for health.

Climate emergency and environmental breakdown are an observational

warning to Europe and the world. To conquer these challenges, the
European Green Deal will reshape the European Union into a
contemporary, resource-efficient, cost-efficient and competitive economy,
ensuring:
● net-zero release and discharge of greenhouse gases by 2050
● economic expansion separated from resource use
● no person and no place is bottled out
 The European Green Deal has been a life belt out of the COVID-19
widespread. 1/3 of the 1.8 trillion euro expenditure from the
NextGenerationEU Recovery Plan, and the EU’s seven-year budget will
endow the European Green Deal.

4. Quality Education : To conduct green finance into this mainstream, the

Green Finance Education Charter is a critical step towards this goal and
should help incorporate sustainable finance principles and practice
throughout the business, finance and professional services sectors.
According to UK’s Green Finance Strategy in July 2019, the Green
Finance Education Charter brings together many of the world’s leading
professional bodies for the first time in a commitment to integrate green
and sustainable finance principles into the education and training
programmes of finance professionals worldwide.

It aims at ensuring impartial quality education and facilitate lifelong

education opportunities for everyone. It also aims to provide equal access
to affordable vocational training, to eliminate gender and wealth
disparities and achieve universal access to a quality higher education.

5. Gender Equality : (“Bonds to Bridge the Gender Gap: A

Practitioner's Guide to Using Sustainable Debt for Gender Equality”,
n.d.) Global debt capital markets play an important role in financing
progress toward gender equality in both the public and private sectors.
The rise of sustainable finance offers new ways to uniquely drive finance
to address social issues, including gender inequality; and investors are
increasingly adopting strategies to intentionally, and measurably, use
their capital to reduce “the gender gap”—the inequalities that persist
between women and men. Debt instruments such as Social,
Sustainability, and Sustainability-linked Bonds and Loans provide
financing opportunities for market participants that want to advance.

6. Clean Water and Sanitation : An absolute expand in water and

sanitation funding is required to accelerate the Sustainable Development
Goals. The present extent of water, sanitation and hygiene investment is
not sufficient to accomplish SDG targets to achieve ubiquitous access to
safe and affordable drinking-water, adequate hygiene & proper sanitation.
Advanced origin of investments and finance, and better use of existing
sources, are key components of enabling environment that we urgently
need to create if we are to meet our promises.

7. Affordable and clean energy : Green finance aims to decrease green

house gas releases and protect environment by providing investment and
 financing service for eoi-friendly projects like Hydropower, Geothermal
Power, Solar energy and Wind Energy. (Lin 2022)For example, the Equator
Principles were designed to deal with environmental and social issues related
to financing, and the climate finance provides financial assistance for green
projects to mitigate and adapt to climate change. On the one hand, green
finance can transfer financial resources from high-pollution and high-energy-
consuming industries to green industries through structural effects, and
reduce greenhouse gas emissions.

8. Decent Work and Economic Growth : (“The Impact of Green Finance on

Inclusive Economic Growth—Empirical Analysis Based on Spatial
Panel”, n.d.) Green finance plays a significant role in promoting inclusive
economic growth. Based on this, this paper selects panel data from 31
provinces in China from 2005 to 2019 and USES spatial econometric model to
explore the impact of green finance on inclusive economic growth. The
research results show that green finance has different effects on inclusive
economic growth in different regions, and the influence of green finance on
inclusive economic growth in central and western regions is more significant
than that in eastern regions. At the national level, green finance promotes
inclusive economic growth. The implication is that appropriately strengthening
green finance is an important way to effectively enhance inclusive economic
growth.

Economic growth should be a positive force for the whole planet.This is why
we must make sure that financial progress creates decent and fulfilling jobs
while not harming the environment. We must protect labour rights and once
and for all put a stop to modern slavery and child labour. If we promote job
creation with expanded access to banking and financial services, we can
make sure that everybody gets the benefits of entrepreneurship and
innovation.

9. Industry, Innovation and Infrastructure : Inclusive and sustainable

industrialization, together with innovation and infrastructure, can unleash
dynamic and competitive economic forces that generate employment and
income. They play a key role in introducing and promoting new technologies,
facilitating international trade and enabling the efficient use of resources.
However, the world still has a long way to go to fully tap this potential. Least
developed countries, in particular, need to accelerate the development of their
manufacturing sector if they are to meet the 2030 target, and scale up
investment in scientific research and innovation. Global manufacturing growth
has been steadily declining, even before the outbreak of the COVID-19
pandemic. The pandemic is hitting manufacturing industries hard and causing
disruptions in global value chains and the supply of products.

10. Reduced Inequalities : (“Reduce inequality within and among countries -

United Nations Sustainable Development”, n.d.) Reducing inequalities and
ensuring no one is left behind are integral to achieving the Sustainable
Development Goals. Inequality within and among countries is a persistent
cause for concern. Despite some positive signs toward reducing inequality in
some dimensions, such as reducing relative income inequality in some
 countries and preferential trade status benefiting lower-income countries,
inequality still persists.

COVID-19 has deepened existing inequalities, hitting the poorest and most
vulnerable communities the hardest. It has put a spotlight on economic
inequalities and fragile social safety nets that leave vulnerable communities to
bear the brunt of the crisis. At the same time, social, political and economic
inequalities have amplified the impacts of the pandemic.

On the economic front, the COVID-19 pandemic has significantly increased

global unemployment and dramatically slashed workers’ incomes.COVID-19
also puts at risk the limited progress that has been made on gender equality
and women’s rights over the past decades. Across every sphere, from health
to the economy, security to social protection, the impacts of COVID-19 are
exacerbated for women and girls simply by virtue of their sex.

The rate of post-pandemic economic recovery in developed countries,

however, points to a way forward for greater investment. “The developed
world proved in the last two years that millions can be lifted out of poverty by
the right kind of investment – in resilient and clean infrastructure, social
protection or public services,” said UN Under Secretary-General Liu Zhenmin,
head of the Department of Economic and Social Affairs, which produced the
report. “The international community must build on that progress, and ensure
developing countries can invest at similar levels, while reducing inequality and
securing a sustainable energy transition.”

11. Sustainabilities and Communities : In spite of, increasing political

responsibilities to overall green finance, still it is not reaching most of the
weather-sensitive communities. Financial Service Providers (FSPs) of Private
sector and public sector actors contributes in partnership to develop feasible
models and structures to help and fulfil these vulnerable groups. Inclusive
Climate Finance for Communities in the Asia Pacific (ICCAP) aims for
generating social, environmental, and economic benefits. These services will
qualify households to diversify revenue streams that provide greater
resistance to climate effects.

12. Responsible consumption and production : Global utilisation and

production is force of the global economy stays on the use of the natural
environment and resources in a way that impacts planet in a destructive way.
Social and economic growth over the last century has been followed by
surroundings and nature degradation that is threatening the systems on which
our future development and survival depends.

Each year, an estimated one third of all food produced – equivalent to 1.3
billion tonnes worth around $1 trillion – ends up rotting in the bins of
consumers and retailers, or spoiling due to poor transportation and harvesting
practices. If people worldwide switched to energy efficient light bulbs the world
would save US$120 billion annually.
Should the global population reach 9.6 billion by 2050, the equivalent of
almost three planets could be required to provide the natural resources
 needed to sustain current lifestyles. The COVID-19 pandemic offers countries
an opportunity to build recovery plans that will reverse current trends and
change our consumption and production patterns towards a more sustainable
future.

Green financing here in consumption and production implies doing more and
better with less. It is all about separating financial growth from environmental
degradation, which will help in increase of resource efficiency and promoting
sustainable lifestyles. It can also help in poverty alleviation and the movement
towards green and low carbon economies.

13. Climate Action : Climate transition has broad line up in financial and
economic implications.Hence, financial authorities and central banks
throughout the world are playing an active role in promoting the change
towards a sustainable economy.

The Bank of International Settlements(BIS) encourages these attempts via its

own well organised analysis. The BIS and its committees also participate in
external forums, such as the Network of Central Banks and Supervisors for
Greening the Financial System (NGFS) and the Sustainable Insurance Forum
(SIF).

14. Life Below Water : It states conservation and sustainable use of seas,
oceans and marine for sustainable progress. Clean seas and oceans are
important to our survival.They cover 70% of the whole planet and we subsist
on them for energy, water and food. Yet, we have managed to do enormous
degradation to these resources. We must protect them by eliminating pollution
and overfishing and immediately start to responsibly manage and protect all
marine life around the world.

15. Life on Land : This objective aims at protecting, restoring and promoting
efficient and sustainable usage of terrestrial ecosystems, sustainably manage
plantations and forests, fight drylands and deforestation, and stop and reverse
land deterioration and terminate wildlife-conservation and ecosystem loss.

(“Sustainable Development Goal 15”, n.d.)The nine "outcome targets"

include: Conserve and restore terrestrial and freshwater ecosystems; end
deforestation and restore degraded forests; end desertification and restore
degraded land; ensure conservation of mountain ecosystems, protect
biodiversity and natural habitats; protect access to genetic resources and fair
sharing of the benefits; eliminate poaching and trafficking of protected
species; prevent invasive alien species on land and in water ecosystems; and
integrate ecosystem and biodiversity in governmental planning. The three
"means of achieving targets" include: Increase financial resources to conserve
and sustainably use ecosystem and biodiversity; finance and incentivize
sustainable forest management; combat global poaching and trafficking.
16. Peace, Justice and Strong Institutions : Differences, unstability, weak
institutions and finite access to justice has always been a great threat to
sustainable development. Green finance aims to improve lives worldwide by
reducing conflicts, violence, refining access to justice, and encouraging
responsible and inclusive institutions. Green finance also aims at creating
secured, sustainable, obvious, and responsible institutions that are important
for continual and progressive development and critical for governments to
deliver services to their citizens. In 2020 governments throughout the world
have analysed themselves under pressure while managing the outgrowth and
results of the COVID-19 widespread.

17. Partnerships for Goals : Green financing focuses at strengthening the

channel of execution and regenerate the worldwide partnership for
sustainable development.

The UN explains: A successful sustainable development agenda requires

partnerships between governments, the private sector and civil society. These
inclusive partnerships built upon principles and values, a shared vision, and
shared goals that place people and the planet at the centre, are needed at the
global, regional, national and local level.
 Scope of Green Financing
Deploying funds for green finance, that is establishing financing for green
industries such as clean energy, energy-conservation, environment
preservation, and absolute transportation to make successful emission
reduction, is a major challenge but an opportunity too. Recognising the risks
from climate fluctuations and the financial requirements to alleviate and adjust
to them.

1. Improving the Impact of Fiscal Stimulus in Asia: An analysis of green

recovery investments and opportunities

When the initial responses to COVID-19 widespread were concerned on

rescue efforts, councils and administrations are now changing into economic
improvement efforts. There are 5 Asian countries that have together declared
a sum of USD884 billion in COVID-19 rehabilitation stimulus bundles since the
upsurge of pandemic in Feb 2022. These five countries were Indonesia, India,
the Philippines, South Korea and Singapore.

This study, jointly produced by Climate Policy Initiative and Vivid Economics
maps the ‘greenness’ of these fiscal stimulus measures and their contribution
towards country-level climate objectives. As compared to unexceptional
stimulus action, green stimulus actions have been proven to provide both
short-term profitable gains and develop national wealth in the long-term.
Green recovery actions, such as funding in net zero emission, sustainable
energy, energy planning, conveyance and nature-based alleviation and
adjustment solutions provide higher employment strength, in addition to other
financial rebates and larger social advantages, than policies that seek to prop
up aging, more polluting means of production.

Development structures that depends on the degradation of natural funds and

accelerate the climate emergencies are not efficient as business models with
heavy emissions that are harmful to environment are now experiencing the
possibility of depleting raw materials, decreased demand, and finally shedding
financial assets.

Reinstituting biodiversity and nature, assertively changing into renewable

energy, and fundings in efficient infrastructure are job-related activities that
can help regions strongly by the economic crisis, while also serving to each
country’s climate goals. Coalition of Finance Ministers for Climate Action
highlighted that following instant action to handle the crisis, policymakers need
to structure and deploy recovery plans that encourages efficient development
over the medium and long term.
2. Delivering a Sustainable Financial System in India

The India Advisory Council of the UNEP India Inquiry was assembled by the
Federation of Indian Chambers of Commerce and Industry (FICCI). This
analysis, emphasises important proposals resulting from their discussions for
syncing the Indian financial system with sustainability.

In the Indian context, they focus at the call development of stronger and
reliable ‘efficiency aligned market framework’ focused on institutional
investment, banking, foreign direct investment, and public finance institutions.
They called for rules and regulatory reorganisation in following areas:

1. Growth of incentives such as production and equity tax credits.

Reinforcing subsisting institutions like Indian Renewable Energy
Development Agency to become the green growth financing model.

2. Decreasing external commercial borrowing funding of green projects by

exempting withholding tax, replacement of construction finance and
refinancing and innovative solutions for hedging.

3. Addition of sustainable energy area within the Priority Sector Lending

(PSL) category needs.

4. Enhancement of the plans and actions of the National Clean Energy

Fund.

They are also known as important sectors of market innovation in terms of

green bonds and green credit ratings.

3. Climate Investment Opportunities in Cities - An IFC Analysis

A large number of the world’s population currently resides in metropolitan

areas, a number anticipated to hit 70% by 2050. With 60 percent of the area
awaited to be metropolitan by 2030 remaining to be built, climate deliberation
plays a major role in urban planning decisions making, and infrastructure
projects authorised for the future.

As cities coordinate together to accomplish the requirements of their residents,

they can upsurge historical strategies to development– which develops
significant chances for climate funding. An IFC report discovers that cities in
developing markets throughout the world have the power to captivate more
than $29.4 trillion in increasing climate-related fundings in six key areas by
2030.
Area-specific funding potentials are evaluated at the regional as well as global
levels. It also focuses on urban flexibility, financing strategies, and includes six
deep analysis of specific cities – one from each region, representing different
and various stages of development:

● Rajkot, India
● Jakarta, Indonesia
● Amman, Jordan
● Mexico City, Mexico
● Nairobi, Kenya
● Belgrade, Serbia

60% of the area expected to be urban throughout the world by 2050 remains
to be built. Instead of diverting inadequate resources to net-zero-carbon,
robust, sustainable, and climate-friendly investments, these cities can go
through historical strategies and plans to to urbanization.

One of the urban climate commitments in Paris agreements is regarding

groundswell – but cities need support changing them into a reality. Programs
like Global Covenant of Mayors, Local Governments for Sustainability (ICLEI),
C40 Cities, 100 Resilient Cities, and CDP helps in planning and strategic help
important to ensuring that targets are achieved. The City budgets alone can’t
fund climate investment at the needed scale, but developing interest from the
private sector and use of PPPs, land value capture, green bonds, &
collaborative partnerships decreases the gap. The private sector can play a
major role in encouraging cities through a combination of remodelling,
innovation, discovery, fundings, and new service delivery cycles.
 REVIEW OF LITERATURE
Institutional investors can play an important role in green financing by creating
liquidity in the market through mobilizing funds of pension funds, hedge funds,
mutual funds etc. as per Climate Bonds Initiative Report (2019). [7] in the study
revealed that in Asia (excluding Japan) the proportion of socially responsible
investment in relation to total managed assets accounts only 0.8% in the year
2016 which is much lower in comparison to the world regions.
The major challenge in the way of sustainable development is the lack of or
inadequate disclosure requirements that address environmental or long-term
systemic risk factors. [3]in their study conducted in Bangladesh recommended
that for promoting sustainable development different environment friendly
projects should be financed by banks. Banks should play a pivotal role in
initiating new environmental friendly products. [9] shown that domestic green
bonds will help in providing additional finance which in turn will help in
fulfilling the demand for green infrastructure investment. With the issuance of
sovereign and sub sovereign bonds government is also playing an active role in
the issuance of green bonds. UN Environment Report (2016) proposed that for
promoting green transformation, the role of financial system and the
government will play a crucial role.
To uphold green finance, private public partnership is needed. G20 will
continue to play a significant role in policy making and designing good practice
for green transformation. [1] in their paper revealed that funds raised through
green bonds should be utilized for different environmental related projects in
eligible categories instead of utilizing it only in low carbon and climate resilient
projects. [2] shown that demand for Green bonds and green funds will increase
because of the increase in concern about the environment sustainability
Investment in green projects are increasing leading to increase in demand of
green finance[8] revealed that a mechanism harmonizing the relationship
between the ecology and finance to be set up for the efficient green financial
system. Green finance if effectively managed will help in the proper allocation
of resources thereby minimizing environmental risk. [4]in the study suggested
that the role of government will be important in removing the barriers in green
finance. The government should focus on funding city wise in energy saving
products and it should administer locally.