The National Highways Authority of India plans to float Green bonds in order to raise funds around $750 million. They are the green masala bonds that are required to raise the funds in millions. The funds raised through the Green Bonds would be listed on the LSE or London Stock Exchange and then they would be used for the greening of real estate projects and the highway projects.
The mode of raising fund is profitable for both parties
The chairman of NHAI clearly remarked that green masala bonds will be used for raising $500 million-$750 million. It is the sort of debt instrument bonds to be used to raise funds in millions from the investors. This mode of raising funds is profitable for both the parties since the entity issuing the bonds will get capital and funds to finance the real estate projects, and on the other hand, the one who is financing the project by way of green bonds will get an interest on the capital. As the name suggests, the Green Bond is the bond which encourages environment friendly practices for the construction of properties. It is healthy and promotes environmentally sustainable projects and practices.
Tax benefit from Green Bond investment
Not only the investor gets interest payment on the investment towards green bonds but also he gets tax benefits. In order to encourage green constructions, most of the global bodies offer finance at lower rate of interest. Investment on green bond is also covered under the CSR or Corporate Social Responsibility to help one reap the tax benefits.
How to raise funds for your property with green bonds?
If you want to raise funds by using the Green Bonds, your property must comply with certain norms. For instance, in order to qualify for the funds, the property’s carbon footprint should be lower. Right from conceptualization to the completion of your real estate project, you must abide by environmental friendly ways. The building should be environment friendly and only then you can raise funds with the green bonds. To make this possible, your property or the building can use proper ventilation and natural lighting solutions. The construction of the building should be such that it can sustain without using much of electricity, lighting and water. When it comes to light, it can use the sun’s light or natural lighting. For generating electricity, there can be the use of solar panels. Other criteria are also set apart from these.
The various agencies issuing the green certificates
- The foremost body that issues green certificate to a building is IGBC or Indian Green Building Council. Being the part of Confederation of Indian Industry, the body was formed in 2001.
- Energy Conservation Building Code
- EDGE Program in India
- Green Building Rating System of India
Raising funds through Green Bonds is pretty challenging as there are so many agencies with their own norms and criteria. The Government should lay down certain clear guidelines to remove the confusion regarding what guidelines to follow and what not to.
Sai Kalyan Builders, one of the leading real estate builders in north Bengaluru / Bangalore. If you are planning to buy 2 BHK flats near Manyata Tech Park consult Sai Kalyan Builders.
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