The Disclosure requirements of issuance and listing of green debt securities

• Overview

Securities and Exchange Board of India (SEBI) has prescribed SEBI (Issue and Listing of Debt Securities) Regulations, 2008 ("SEBI ILDS Regulations")to govern public issue of debt securities and listing of debt securities issued through public issue or on private placement basis.

Further SEBI has issued Circular no. CIR/IMD/DF/51/2017 for public issue and listing of Green Debt Securities and listing of privately placed Green Debt Securities,

Definitions of "Green" or "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:

• Any other category as may be specified by Board, from time to time.

• Disclosures in Offer Document/ Disclosure Document and other requirements

• A statement on environmental objectives of the issue of Green Debt Securities

• Brief details of decision-making process issuer has followed/would follow for determining the eligibility of project(s) and/or asset(s)

• An indicative guideline of the details to be provided is as under:

• Process followed/ to be followed for determining how the project(s) and/or asset(s) fit within the eligible green projects categories

• The criteria, making the project(s) and/or asset(s) eligible for using the Green Debt Securities proceeds

• Environmental sustainability objectives of the proposed green investment

• The details of the system/procedures to be employed for tracking the deployment of the proceeds of the issue

• 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,

• The issuer may appoint (optional) 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.

• Continuous disclosure requirements

1. Following shall be provided along with the half yearly & annual financial results :

a). Utilization of the proceeds of the issue, as per the tracking done by the issuer using the internal process as disclosed in offer document/disclosure document. The utilization of the proceeds shall be verified by the report of an external auditor, to verify the internal tracking method and the allocation of funds towards the project(s) and/or asset(s), from the proceeds of Green Debt Securities.

b) Details of unutilized proceeds

2. additional disclosures have to be provided along with annual report:

a) List of project(s) and/or asset(s) to which proceeds of the Green Debt Securities have been allocated/invested including a brief description of such project(s) and/or asset(s) and the amounts disbursed

b) Qualitative performance indicators and, where feasible, quantitative performance measures of the environmental impact of the project(s) and/or asset(s).

c) Methods and the key underlying assumptions used in preparation of the performance indicators and metrics;

• Kindly note :

• An issuer of Green Debt Securities or any agent appointed by the issuer, if follows any globally accepted standard(s) for the issuance of Green Debt Securities including measurement of the environmental impact, identification of the project(s) and/or asset(s), utilisation of proceeds, etc., shall disclose the same in the offer document/disclosure document and/or in continuous disclosures.

Source: SEBI Website

Circular on Disclosure Requirements for Issuance and Listing of Green Debt Securities

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