'Green Bonds' and Exchange Traded Funds to Be Introduced to Boost Investment in Hydropower and Renewable Energy

The government has introduced a policy to develop new financial instruments through the capital market to mobilize long-term investment in renewable energy and hydropower projects.

According to the capital market policy and program for the fiscal year 2083/84 (2026/27) recently released by the Securities Board of Nepal (SEBON), environment-friendly financial instruments, including 'Green Bonds', will be developed to raise the necessary investment in the hydropower and renewable energy sectors.

Under the policy, mechanisms to mobilize the capital required for hydropower project construction through the capital market will be strengthened. The government expects this to help secure long-term financial resources for clean energy projects.

Similarly, the policy includes plans to launch Exchange Traded Funds (ETFs) to attract collective investment into the hydropower sector, offering investors opportunities to diversify their portfolios.

SEBON believes that implementing modern financial instruments like Green Bonds and ETFs will increase the participation of both institutional and retail investors in the hydropower and renewable energy sectors, ease capital mobilization, and contribute to sustainable energy development.