Climate Finance Hub
The International Financial Services Centres Authority (IFSCA) has embarked on a meaningful journey, aiming to transform Gujarat International Finance Tec-City (GIFT City) into a prominent “climate finance hub.” This strategic initiative establishes a framework for developing and launching climate finance products that align with India’s long-term sustainability goals. This cause is crucial for all of us.
Shifting Focus: From Onshoring to Sustainability
IFSCA Chairman K Rajaraman emphasizes the evolution of the organization’s agenda, shifting from onshoring offshore entities to spearheading sustainable finance initiatives. With a renewed focus on sustainable finance, the organization aims to address broader environmental challenges and contribute to India’s sustainable development goals by 2047.
Setting Up a Standing Committee
To ensure the realization of GIFT City’s vision of being a climate finance hub, IFSCA has set up a standing committee. This committee, with its comprehensive framework and recommendations for launching climate finance products, is a testament to our commitment. We expect the committee to present its findings to the government by the end of May 2024, a step towards transparency and accountability.
Exploring Climate Finance Products
The committee’s mandate is to explore various climate finance instruments, such as Alternative Investment Funds, transition bonds, transition insurance, and more. Once launched, these innovative financial products will significantly impact mobilizing capital toward climate-friendly investments and promoting sustainable economic growth.
Prime Minister’s Vision for GIFT City
Prime Minister Narendra Modi has envisioned GIFT City as a pivotal hub for climate finance, emphasizing its potential to drive sustainable development. The recent initiatives by IFSCA underscore the government’s commitment to realizing this vision and positioning GIFT City as a global leader in sustainable finance.
Progress Towards Sustainable Lending and Investments
IFSCA is proud to highlight the significant strides made towards sustainable lending and investments in GIFT City. Banks within GIFT City have led by offering “green and sustainable credit,” with a mandated allocation of 5% of total credit towards sustainable initiatives. Moreover, the bond market in GIFT City has witnessed a surge in green, social, and sustainable-linked bonds, a clear indication of the growing appetite for sustainable finance and a promising sign for the future.
Fostering a Thriving Ecosystem
IFSCA is actively fostering a conducive ecosystem for climate finance in GIFT City by supporting the launch of climate funds, collaborating with insurance companies to facilitate climate insurance, and promoting more profound engagement with stakeholders. These efforts aim to create a robust ecosystem, accelerating the transition towards a sustainable and resilient future.
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