Government’s $100m Green Bond contravenes Finance Act: Chaudhry

  • 26th October 2017
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Labour Leader Mahendra Chaudhry warned that Government’s Green Bond  was issued in contravention of the Finance Act.

The Government yesterday launched its sovereign Green Bond issue aimed at raising $F100m for projects aimed at mitigating and adapting to problems created by climate change.

But Mr Chaudhry said: “Parliamentary approval has not been obtained for the $100m to be borrowed under this scheme.”

The Labour Leader was also critical of the fact that the proceeds from the Bond was to go into the Consolidated Fund, raising suspicions that it was just another borrowing mechanism for the debt-ridden FF government.

“Paying the proceeds from the Bonds into the consolidated fund will put it at risk of being used for government’s operating expenditure. Money’s raised for specific purposes must be credited to a Trust Fund and not the consolidated fund,” Mr Chaudhry said.

Meanwhile, Reserve Bank Governor Ariff Ali expressed high optimism, based on initial feedback, that the first issue of $40m would be over-subscribed.

The World Bank and the International Finance Corporation, among the pioneers of the Green Bond market, provided technical assistance to the RBF in issuing the bond.