The Expert Committee on Climate Finance has submitted its first report on Transition Finance to the K. Rajaraman Chairperson, International Financial Services Centres Authority (IFSCA) on 1st July 2024, informed IFSC Authority, PIB.
In an address made to investors and market participants, IFSC on 9th December 2023, the Prime Minster stated, “During our G-20 presidency, one of our priorities was to understand the need for sustainable finance to ensure global growth and stability. This would contribute to the transition towards greener, resilient, and inclusive societies and economies. According to some estimates, Bharat would require at least USD 10 trillion by 2070 to achieve the Net Zero Target. Financing from global sources is essential for this investment. Hence, we aim to make IFSC a global hub for sustainable finance. GIFT IFSC serves as an efficient channel for the necessary flow of green capital to build a low-carbon economy in Bharat. The development of financial products such as green bonds, sustainable bonds, and sustainability-linked bonds will make the path and access easier for the entire world.”
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Hence, on 21st December 2023, IFSCA formed the Expert Committee on Climate Finance to provide a roadmap to develop a climate finance ecosystem and instruments at GIFT IFSC with a special focus on Transition Finance as well as to provide recommendations on establishing the GIFT-IFSC as a global hub for climate financing.
The Report on Transition Finance, as stated by IFSCA, captures the recommendations by the Expert Committee under three pillars:
- Scope and definition of Transition Finance,
- Policy and Regulation,
- Financial Mechanisms and Instruments.
According to IFSC, the role of transition finance in driving investments towards hard-to-abate sectors such as steel, cement, shipping, fertilisers etc. are emphasised as these are crucial for economic growth of India and other developing nations.
It has been further stated that, “the report offers strategic recommendations to IFSCA and policy makers by exploring global best practices and regulatory landscapes, to enhance the role of GIFT-IFSC as a gateway for attracting international climate capital flows in order to achieve India’s ambitious goal of achieving net-zero by 2070.”
The Committee is expected to continue its work and draft its next report on “Transforming GIFT-IFSC into a Climate Finance Hub.”
The Committee is chaired by Dhruba Purkayastha, Director-Growth & Institutional Advancement, Council on Energy, Environment & Water and is also said to include experts across policy think tanks, standard setters, consultants, industry, and global financial institutions.
