Green Bond Framework

Section 1: Use of Proceeds

The proceeds from The Urjadata Green Bonds – PMKUSUM Solar Power Plant Initiative will be exclusively allocated to funding green projects under the PMKUSUM Solar Power Plant Initiative. This initiative focuses on promoting the installation of solar power infrastructure across Madhya Pradesh, contributing directly to India’s renewable energy goals and reducing reliance on fossil fuels. The bond proceeds will support various activities essential to the development and operation of solar power plants, ensuring that all funds are directed towards environmentally sustainable projects.

Eligible Green Projects:

1. Installation of Solar Power Infrastructure:

The bond proceeds will fund the purchase and installation of solar panels, inverters, and related equipment. This infrastructure is vital to generating clean, renewable energy and reducing greenhouse gas emissions in the region.

2. Construction and Development Costs:

Funds will be allocated to cover the construction and development costs of the solar power plants. This includes building the necessary infrastructure to support solar energy generation, such as foundations, electrical systems, and grid connections.

3. Land Acquisition or Leasing:

The bond proceeds will be used for the acquisition or leasing of land required for solar panel installations. This land, primarily agricultural or barren land, will be repurposed for renewable energy production under the PMKUSUM scheme.

4. Operations and Maintenance:

Ongoing operations and maintenance costs are critical to the long-term success of the solar power plants. The bond proceeds will ensure that the plants remain fully operational and continue to produce clean energy over their expected lifespan.

By aligning the use of proceeds with recognized green bond standards, The Urjadata Green Bonds – PMKUSUM Solar Power Plant Initiative ensures that all funds are directed towards projects that have a significant positive environmental impact. The allocation of proceeds to renewable energy development supports India’s commitment to sustainability and reducing its carbon footprint.

Section 2: Project Evaluation and Selection

The success of The Urjadata Green Bonds – PMKUSUM Solar Power Plant Initiative relies on the careful evaluation and selection of eligible green projects. Urjadata employs a rigorous process to ensure that all funded projects meet high environmental and financial standards, aligning with both national and state renewable energy goals under the PMKUSUM scheme. This section outlines the criteria and approval process for project selection.

Selection Criteria:

To ensure that the solar power projects deliver significant environmental benefits, the following criteria are used for project evaluation:

Alignment with National and State Renewable Energy Goals:
- All PMKUSUM projects funded by the green bonds are closely aligned with India’s national renewable energy targets and the specific renewable energy objectives of the state of Madhya Pradesh. These goals include increasing the share of clean energy in the energy mix and reducing dependence on fossil fuels.
Sustainability Objectives:
- Projects are selected based on their alignment with broader sustainability objectives, including reducing greenhouse gas emissions, improving energy efficiency, and contributing to environmental preservation.
Carbon Emissions Reduction Potential:
- A key factor in project selection is the potential for carbon emissions reduction. Projects that demonstrate the ability to significantly reduce CO2 and other harmful emissions are prioritized to maximize the environmental impact of the bond proceeds.
Feasibility and Financial Viability:
- Each project undergoes a thorough feasibility analysis to ensure that it is both technically and financially viable. This includes assessing the project’s capacity to generate renewable energy efficiently and sustainably over the long term.

Approval Process:

The evaluation and selection of projects for The Urjadata Green Bonds – PMKUSUM Solar Power Plant Initiative is overseen by a dedicated team within Urjadata. This team is composed of experts in renewable energy, finance, and environmental sustainability. The committee is responsible for ensuring that all selected projects meet the green bond standards and deliver meaningful environmental benefits.

Internal Review: The dedicated team at Urjadata conducts an initial review of all proposed projects to ensure they meet the established selection criteria.
External Consultation: To further enhance the decision-making process, external consultants specializing in renewable energy and sustainability are involved in evaluating the technical aspects of the projects. This ensures that all projects are not only environmentally beneficial but also financially sound.

By employing a comprehensive evaluation and approval process, The Urjadata Green Bonds – PMKUSUM Solar Power Plant Initiative guarantees that all funded projects contribute to India’s sustainability goals and deliver long-term environmental and financial benefits.

Section 3: Management of Proceeds

Effective management of proceeds is essential to ensuring that the funds raised through The Urjadata Green Bonds – PMKUSUM Solar Power Plant Initiative are exclusively allocated to eligible green projects. Urjadata is committed to transparency and accountability, implementing a robust system for tracking and managing the proceeds to ensure compliance with recognized green bond standards.

Proceeds Tracking:

Dedicated Account: All proceeds from the green bond issuance will be deposited into a dedicated account specifically set up for managing funds related to eligible green projects under the PMKUSUM Solar Power Plant Initiative. This ensures that the funds are isolated from other corporate finances, providing clear visibility into how the green bond proceeds are being used.
Internal Tracking System: Urjadata will implement a detailed internal tracking system to monitor the allocation of funds. This system will record all transactions and expenditures related to the solar power projects, ensuring that the proceeds are directed exclusively towards the installation of solar power infrastructure, construction and development costs, land acquisition, and ongoing operations and maintenance.

By maintaining a dedicated account and an internal tracking system, Urjadata ensures that the proceeds are used responsibly and in alignment with the objectives of the green bond framework.

Proceeds Allocation:

Full Allocation: If required by the nature of the project, the proceeds may be fully allocated upfront to cover the immediate costs of developing and constructing the solar power plants. This approach will be taken if the projects need significant upfront investment to move forward efficiently.
Phased Allocation: In cases where the projects require staggered investments, the proceeds will be distributed in phases as the projects progress. This phased approach ensures that funds are allocated in a timely manner according to project milestones and that resources are available throughout the development and operational phases.

Urjadata’s flexible approach to proceeds allocation allows for efficient project funding, whether through full upfront investment or phased disbursements, depending on the specific requirements of the solar power projects.

Unallocated Proceeds:

Temporary Investment: Any unallocated proceeds will be temporarily invested in low-risk, liquid financial instruments that comply with Urjadata’s investment policies. This ensures that the funds remain secure and available for future allocation to the green projects as needed. The temporary investment of unallocated proceeds will not compromise the environmental integrity of the green bond initiative.

Through rigorous tracking, management, and allocation of proceeds, The Urjadata Green Bonds – PMKUSUM Solar Power Plant Initiative maintains full compliance with international green bond standards, ensuring that all funds are used to advance renewable energy projects that deliver significant environmental benefits.

Section 4: Reporting

To ensure transparency and accountability, The Urjadata Green Bonds – PMKUSUM Solar Power Plant Initiative is committed to providing detailed annual reports on the use of proceeds and the environmental impact of the funded projects. These reports will keep investors and stakeholders informed about the progress of the solar power projects and the positive environmental outcomes achieved through the initiative.

Frequency of Reports:

Annual Reporting: Urjadata will release annual reports that provide a comprehensive overview of how the proceeds from the green bond issuance have been allocated and the progress of the solar power projects. These reports will be available to all stakeholders, ensuring that they have access to up-to-date information about the initiative.

By committing to annual reporting, Urjadata ensures that investors are regularly informed about the status of the projects and the impact of their investments.

Report Content:

Each annual report will include the following key information:

Proceeds Allocation:
- Detailed updates on how the green bond proceeds have been allocated across eligible projects. This will include a breakdown of expenditures related to solar power infrastructure installation, construction and development costs, land acquisition, and operations and maintenance.
- Clear explanations of any phased allocations and how funds have been distributed over time, if applicable.
Project Progress:
- Updates on the progress of the solar power projects, including key milestones achieved during the construction and operational phases. This section will provide insights into the ongoing development of the solar plants and any challenges or successes encountered along the way.
Environmental Impact Metrics:
- Detailed environmental impact metrics will be included in each report, demonstrating the positive outcomes of the projects. This will cover:
  - Carbon Emissions Reductions: Quantifying the amount of carbon dioxide (CO2) emissions avoided as a result of the solar power generation.
  - Renewable Energy Generated: Reporting on the total amount of renewable energy produced by the solar power plants and the contribution this energy makes to India’s renewable energy targets.
  - Additional Environmental Impact: Reporting on other related environmental benefits, such as improvements in air quality, reduction of other greenhouse gases, and conservation of natural resources.

By including these critical metrics, the reports will provide stakeholders with a clear understanding of the environmental and social impact of the green bond-funded projects.

Impact Reporting Standards:

Urjadata’s annual reports will be aligned with recognized reporting standards for green bonds, ensuring that the information provided meets the highest levels of transparency and accountability. The reports will adhere to guidelines established by the Green Bond Principles (GBP) and other relevant industry standards.

In addition to these reports, Urjadata will make efforts to engage with stakeholders through periodic updates and communication, ensuring that all parties remain informed about the progress and impact of the solar power projects.

Through rigorous and consistent reporting, The Urjadata Green Bonds – PMKUSUM Solar Power Plant Initiative demonstrates its commitment to transparency and responsible management of green bond proceeds, ensuring that the environmental and financial goals of the initiative are achieved.

Final Recap: Green Bond Framework

Now that we’ve completed all sections of the Green Bond Framework, here’s a quick recap of what’s included:

Use of Proceeds: How the bond proceeds will be exclusively allocated to the PMKUSUM Solar Power Plant Initiative.
Project Evaluation and Selection: Criteria and process for selecting eligible green projects.
Management of Proceeds: Tracking and allocation of funds to ensure transparency and compliance with green bond standards.
Reporting: Annual updates on proceeds allocation, project progress, and environmental impact metrics.

This comprehensive Green Bond Framework ensures that The Urjadata Green Bonds – PMKUSUM Solar Power Plant Initiative meets the highest standards for green bonds, delivering both environmental and financial benefits.