Under assignment with the Asian Development Bank, Verdurous worked to support the Royal Monetary Authority (RMA) of Bhutan, and the Royal Securities Exchange of Bhutan (RSEB), to develop “Green” Financial Instruments and in the medium-term, to help launch a Green Exchange within the RSEB.
The Verdurous team assessed the demand for green funding based on published literature, statistics and various documents including the Green Finance Roadmap, the draft of the Green Taxonomy, Bhutan’s Nationally Determined Contribution (NDC), and related national climate and environmental policies, regulations and targets. Complying with the sector-wise classification specified within the [draft] Green Taxonomy and subject to the project types and sizes specified within the second NDC, the estimates for equity and debt investments were developed for implementing proposed climate-friendly projects in Bhutan.
The team identified and assessed relevant legal, institutional, technological, and financial structures operating within Bhutan in the context of issuance of green bonds. Long-term “green bond” standards, listing requirements, costs, and reporting formalities were evaluated, summarized, and tabulated to provide RSEB with a comparison of product characteristics and platform specifications.
The team also reviewed the readiness of RSEB to issue green bonds, and offered recommendations for monitoring, reporting, verification, and tracking of the use of proceeds. Subject to the assessment of such “readiness”, the assignment was slated to review and identify the regulatory gaps or other barriers in the issuance of green bonds by examining current financial, trading, and market regulations and institutional arrangements, and comparing such market structures with international best practices.
Based on the analysis of green bond listing requirements and periodic reporting mandates prescribed by some of the stock exchanges/ platforms analyzed, the study recommended a phased expansion of green bond activity in Bhutan.