National Bank for Agriculture and Rural Development (Nabard) is in talks with international agencies to set up a carbon fund to meet the challenges posed by climate risk, said chairman Shaji K V on Friday.
Speaking at the FIBAC conference in Mumbai, Shaji said, “…we are working with some international agencies to set up a carbon fund. This is because in the West a lot of developments are happening in the carbon credit market. We need to leverage those developments and our appetite for India.”
“We are working with the Food and Agriculture Organization (FAO) for setting up the carbon fund in India. We are also setting up some training institutes where we will have a climate change establishment,” he added.
In addition, Nabard has also set up a climate change fund of Rs 100 crore, which will be utilised for developing capacities of institutions working in rural areas. The fund will help these institutions in developing innovative products that will help mitigate the challenges raised by climate change, Shaji said.
He added that the fund will be enlarged, depending on the demand.
According to a recent study by Coalition Disaster Resilient Infrastructure (CDRI), globally, assets worth nearly $800 billion are getting affected on an annual basis due to climate change.
In India, the impact is close to $30 billion with critical infrastructure getting lost on an annual basis in some form or the other.
Meanwhile, Madhav Nair, country head & chief executive officer (CEO), Bank of Bahrain and Kuwait, said, the Government of India’s plan to develop a taxonomy for climate finance is the need of the hour. It is because a lot of mid-tier corporates still don’t see the need to start looking towards climate change.
Climate finance taxonomy is a set of guidelines that will help investors and institutions direct funds towards investment that will aid in tackling climate change.
During Budget 2024-25, Finance Minister Nirmala Sitharaman had announced that the government will be developing a climate finance taxonomy. It will increase the availability of capital for climate adaptation and mitigation.
First Published: Sep 06 2024 | 9:15 PM IS