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SEBI circular on disclosure requirements for Green Debt Securities

A Debt Security shall be considered as Green or „Green Debt Securities‟, if the funds raised through issuance of the debt securities are to be utilised for project(s) and/or asset(s) for Renewable and sustainable energy,  Clean transportation, Sustainable water management, Climate change adaptation, Sustainable waste management, Biodiversity conservation  or  any other category as may be specified by Board.

Circular

CIR/IMD/DF/51/2017

 

May 30, 2017

 

To

All Issuers of Corporate Debt Securities
All Recognized Stock Exchanges
All Registered Merchant Bankers

Dear Sir / Madam,

Sub: Disclosure Requirements for Issuance and Listing of Green Debt Securities
1. SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (“SEBI ILDS Regulations”) , govern public issue of debt securities and listing of debt securities issued through public issue or on private placement basis, on a recognized stock exchange.

2. For public issue and listing of Green Debt Securities and listing of privately placed Green Debt Securities, in addition to the requirements as prescribed under SEBI ILDS Regulations and Circulars made there under, following shall be applicable:
2.1. Definition of Green Debt Securities :
A Debt Security shall be considered as „Green‟ or „Green Debt Securities‟, if the funds raised through issuance of the debt securities are to be utilised for project(s) and/or asset(s) falling under any of the following broad categories:
a. Renewable and sustainable energy including wind, solar, bio-energy, other sources of energy which use clean technology etc.
b. Clean transportation including mass/public transportation etc.
c. Sustainable water management including clean and/or drinking water, water recycling etc
d. Climate change adaptation
e. Energy efficiency including efficient and green buildings etc.
f. Sustainable waste management including recycling, waste to energy, efficient
disposal of wastage etc.

g. Sustainable land use including sustainable forestry and agriculture,
afforestation etc.
h. Biodiversity conservation
Any other category as may be specified by Board, from time to time.

2.2. Disclosures in Offer Document/ Disclosure Document and other
requirements
The issuer of a Green Debt Securities shall make following disclosures:
a. A statement on environmental objectives of the issue of Green Debt Securities
b. Brief details of decision-making process issuer has followed/would follow for determining the eligibility of project(s) and/or asset(s), for which the proceeds are been raised through issuance of Green Debt Securities. An indicative guideline of the details to be provided is as under:
i. process followed/ to be followed for determining how the project(s) and/or asset(s) fit within the eligible green projects categories as provided at para
2.1 above ;
ii. the criteria, making the project(s) and/or asset(s) eligible for using the Green Debt Securities proceeds; and
iii. environmental sustainability objectives of the proposed green investment.
c. Issuer shall provide the details of the system/procedures to be employed for tracking the deployment of the proceeds of the issue.
d. Details of the project(s) and/or asset(s) or areas where the issuer, proposes to utilise the proceeds of the issue of Green Debt Securities, including towards refinancing of existing green project(s) and/or asset(s), if any.
e. The issuer may appoint an independent third party reviewer/certifier, for reviewing /certifying the processes including project evaluation and selection criteria, project categories eligible for financing by Green Debt Securities, etc. Such appointment is optional and is at the part of issuer, however any such appointment of reviewer/certifier shall be disclosed in the offer document.

For detailed information on continuous disclosure requirements and responsibilities of issues circular can be accessed here

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