Current Affair 1:

Why Green Bonds is important in India?

 

In the Union Budget for 2022-23, the government announced that it will be issuing sovereign green bonds as part of its overall market borrowings to mobilise resources for green infrastructure.

The government plans to invest the funds raised through the issue of green bonds in environmentally sound and sustainable projects that would help in reducing the carbon intensity of the economy.

The RBI will issue green bonds worth Rs 16,000 crore in two tranches of Rs 8,000 crore each. The green bond issuance accounts for 1.1 per cent of the government’s gross market borrowing of Rs 14.21 lakh crore.

Framework for green bond issuance

In November 2022, the government issued a document outlining the framework for issuance of sovereign green bonds. The framework draws from the International Capital Market Association’s (ICMA) Green Bond Principles. In the absence of any binding legal framework, the world follows the ICMA principles as a guidepost to benchmark their green bond frameworks.

Drawing on the principles, the government’s sovereign green bond framework document provides a list of eligible categories of projects. These include renewable energy projects, projects that promote energy efficiency, projects towards pollution control etc.

The government intends to allocate funds within 24 months following issuance. The devolution of funds will be in tranches subject to achievement of targets specified in the project document.

The Ministry of Finance has constituted a Green Finance Working Committee to facilitate the process of project evaluation and selection. Under the supervision of the Committee, an annual report on the allocation of proceeds to the eligible projects, the description of projects financed, status of implementation and unallocated proceeds will be brought out.

The funds raised through the issuance of green bonds will be deposited in the Consolidated Fund of India (CFI). Funds will be made available through the CFI. The Public Debt Management Cell (PDMC) will keep a track of proceeds and monitor the allocation of funds towards eligible green expenditures.

Why investing in green bonds?

While companies have been issuing green bonds, sovereign green bond issuance is a relatively new phenomenon. The first sovereign green bonds were issued by Poland as recently as 2016. By end December 2020, the green bond market hit USD 1 trillion.

As of June 2022, 25 countries have issued sovereign green bonds. The most recently issued sovereign green bond was by Singapore.

As far as emerging markets are concerned, 2021 was one of the strongest years with USD 95 billion issuance of green bonds. After China, India was the second largest issuer of green bonds amongst the emerging economies.

India entered the green bond market in 2015 with YES Bank issuing the first green bond for financing renewable and clean energy projects, particularly for wind and solar. The issuance was in the form of a green masala bond.

Gradually, the green bond market has expanded to several public sector undertakings, state-owned commercial banks, state-owned financial institutions, corporates, and the banking sector. The entry of sovereign to the green bond market signals commitment to low-carbon growth strategies, and helps crowd-in the private sector.

If an entity (sovereign or a company) chooses to issue a green bond, it may attract new investors interested in green investment, thereby increasing demand for the bond. If the enhanced demand pushes the green bond’s yield lower than that of a comparable bond, this yield difference is called the green premium, or “greenium”.

Current Affair 2:

Why India wants to modify Indus Waters Treaty with Pakistan?

 

Since 2015, Pakistan has repeatedly raised objections to India’s Kishanganga and Ratle hydroelectric projects located in Jammu and Kashmir. While Islamabad has made repeated calls for a Court of Arbitration to resolve the matter, New Delhi has insisted that adjudication by a neutral expert is the best way forward.

India has now accused Pakistan of violating the “graded mechanism” of dispute settlement envisaged under Article IX of the Indus Waters Treaty, essentially opposing Islamabad’s direct request for a Court of Arbitration to look into the dispute first instead of a neutral expert.

What is written in Article 9?

In its notice to Islamabad earlier this month, India also accused Pakistan of refusing to discuss the issue during Permanent Indus Commission meetings held between 2017 and 2022.

Kishanganga & Ratle projects

The IWT says the waters of the eastern rivers — Sutlej, Beas and Ravi — belong to India and the western rivers — Indus, Chenab and Jhelum — to Pakistan, barring certain non-consumptive uses.

 

The Kishanganga hydroelectric project, inaugurated in 2018, includes a dam on the tributary of the Jhelum. Pakistan has argued that the dam changes the course of the river and will deplete water levels.

In May 2010, Pakistan raised the matter with the Permanent Court of Arbitration at The Hague. In 2013, the court ruled that India can go ahead with the construction of the dam, so long as it maintains a minimum flow of 9 cubic metres per second (Cumecs), which was more than the Indian government’s proposal of 4.25 cumecs.

Pakistan, while insisting that it still had technical concerns about the design of the project and instead of seeking a neutral expert, wanted another court of arbitration to look into the matter. This was the mistake.

Pakistan should have referred the technical aspects of the Kishanganga dispute to a Neutral Expert. However, Pakistan made an ill-advised U-turn and sought to take all remaining questions to a different court of arbitration.

Current Affair 3:

G20-Chief Science Advisers Roundtable (G20-CSAR)

 

News:

G20-CSAR is a government-to-government level initiative conceptualized through India’s G20-Presidency. The motivation of this initiative is to bring together the Chief Science Advisers and their equivalents of G20 member countries, as well as the invited countries, to deliberate upon and develop collaborative frameworks for some of the common pressing global science and technology (S&T) policy issues. This initiative will also help in establishing an effective and coherent global science advice mechanism.

Bus itna yaad rakhiye…

 

Current Affair 4:

How India’s imports from Turkey outpaced exports in 2022?

 

The bilateral trade between India and Turkey increased 41 per cent in April-November 2022 year-on-year, driven primarily by higher imports of petroleum crude, data from the Ministry of Commerce shows.

Growth of Turkish imports

According to data from India’s commerce ministry, petroleum crude was the top imported item from Turkey in the first eight months of the current fiscal, standing at 1.37 billion kgs, or 10.07 million barrels (assuming 1 barrel is 136 kg).

 

Apart from petroleum crude, imports of Turkish marble and travertine grew 54 per cent in April-November 2022. Imports of apples also grew nearly 50 per cent in the current fiscal.

Major Indian exports to Turkey in the first eight months of this fiscal included automotive diesel fuel, precious stones, yarn, and medical equipment like cannulae, according to the data.

 

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