NABARD Climate Action & Sustainability 2023-2024 PDF

For Internal Use only 7. Climate Action & Sustainability 1. Introduction NABARD carved out a new department, viz. Department of Climate Action and Sustainability (DCAS) during the financial year 2023-24,...

For Internal Use only 7. Climate Action & Sustainability 1. Introduction NABARD carved out a new department, viz. Department of Climate Action and Sustainability (DCAS) during the financial year 2023-24, to give focussed attention on climate action and sustainable operations. NABARD is a Direct Access Entity (DAE) to the Green Climate Fund (GCF), and the National Implementing Entity (NIE) to Adaptation Fund (AF), and National Adaptation Fund for Climate Change (NAFCC). It has facilitated sanction of forty climate action projects with a total financial assistance of ₹1971.56 crore under various funding mechanisms, viz., Green Climate Fund (GCF), Adaptation Fund (AF), and National Adaptation Fund for Climate Change (NAFCC). 2. Major developments (2023-24) A. Policy Landscape Policy framework, and Operational guidelines for Green Taxonomy of NABARD were issued. This would help in systematic classification of NABARD’s development and business portfolio as ‘green’, prioritization of investments, and mobilization of resources for green portfolios. The process for transition of NABARD towards Corporate Net Zero was initiated during the year. B. Climate Finance Climate Change Fund - Interest Differential (CCF-ID) was created with RBI approval through allocation of Interest Differential generated for FY 2022-23. It would enable NABARD to support innovative small/ mid-size projects with focus on adaptation as also to explore new financial tools/ models. NABARD was re-accredited as Direct Access Entity (DAE) of the Green Climate Fund (GCF) during the year. This would help in accessing funding from GCF. ₹ 279.69 crore was disbursed under GCF for the two projects being implemented by Tata Capital Ltd. (TCL) and Odisha Community Tank Development & Management Society (OCTDMS). An amount of ₹ 2.82 crore was disbursed for various initiatives under CCF and CCF- ID. Process was initiated for developing new green products, e.g. climate resilient dairy, solar agri pump sets, rural electric mobility, energy efficiency in value chain, rural home loan bundled with rooftop solar etc. The process to identify potential state level projects based on SAPCC, was initiated for financing. C. Other Initiatives A Technical Support Unit (TSU) was set up at NABARD, with support from Asian Development Bank (ADB), Bill & Melinda Gates Foundation (BMGF), and Intellecap Advisory Services). The TSU would assist NABARD in its climate finance efforts. NABARD collaborated with the Ministry of Agriculture and Farmers Welfare (MoA&FW) for implementation of Voluntary Carbon Market (VCM) framework for 51  For Internal Use only Agriculture in India. MoUs were signed with MoA&FW and the International Institute for Environment and Development (IIED). An MoU was signed on collaborating with the Government of Goa and World Bank for supporting the Blended Finance Facility being set up by the Government of Goa. Collaboration with NABCONS was initiated on Carbon Credit framework to support small holder farmers in NABARD’s NRM projects. The process was initiated for designing Green Literacy programmes. Among the international partnerships during the year were: UNDP – NABARD took over the hosting of Data in Climate Resilient Agriculture (DiCRA), a digital public good, for digital innovations in agriculture and food systems. Post CoP 28, dialogue was initiated with MDBs and international agencies, e.g., ADB, AFD, EIB, FAO, GIZ, JICA, Western Sydney University (WSU), World Bank, etc. for collaborative action. These included exploring Green Finance Facility for India with support from ADB and GCF; working on draft PPR for support from World Bank; collaboration with FAO for joint project development for GCF funding; collaboration with WSU for piloting village groundwater cooperative for groundwater governance; GiZ support under CAFRI-II project involving 1.5 million Euro technical collaboration, etc. 3. Way forward: Operationalizing green taxonomy - green tagging of assets under NABARD’s development and business products/ portfolio; raising of concessional finance through green bonds, MDB funding, etc. Developing a strategy for transition towards Net Zero at corporate level, as also developing capabilities of our clients in the supply chain to enable them to transition towards Net Zero. Initiate action for launching pilot projects on climate finance. Exploring new financial products, e.g., equities, guarantees, returnable grants, blended finance, etc. to support climate projects. Leverage CCF-ID to support innovative projects. Green Village concept – replicate Gujarat model in other states with focus on aspirational districts Active involvement in VCM programme –setting up a sub-registry. Partnership with multilateral/ international/ national agencies for mobilization of funds/ programmes for supporting diverse green finance activities. Capacity building initiatives for staff and external stakeholders in collaboration with the training establishments/ external institutions with focus on green financing, climate related risk, environment, social and governance (ESG) and gender-related aspects. 52  For Internal Use only Photographs of Climate Change Related Projects GCF project: Line of Credit for Solar rooftop segment for commercial, industrial and residential housing sectors in India (FP081) NAFCC project - Mukhyamantri Jal Swavlamban Abhiyaan for Climate Change Adaptation and Water Harvesting in Arthuna, Anandpuri and Sajjangarh Block of District Banswara in Rajasthan (Drone image of Bijalpur Haliya village showing various MPT & PT structures) 53  For Internal Use only III. Internal Service Operations 1. Corporate Planning 1. Business Budget Business Budget of ₹5,30,756 crore for FY 2024-25 was approved by the Board in its 256thmeeting held on 19 March 2024. The budget is expected to take the balance sheet size to more than ₹10 lakh crore crore as on 31 March 2025. 2. Ground Level Credit to Agriculture The Indian agriculture sector has been growing at a CAGR of 4% during the five-year period ending FY 2023 and is estimated to constitute 18 percent of India's GVA in FY24. Ensuring hassle-free credit availability at a cheaper rate to farmers has been the top priority of the GoI and accordingly target for Ground Level Credit (GLC) flow to agriculture is fixed every year. For FY 2022-23, the target for GLC was ₹18,50,000 crore, against which achievement was ₹21,55,163 crore (116%). i. Achievement during 2023-24 During 2023-24 ₹22.84 lakh crore has been disbursed (Provisional) till 29 February 2024 against the target of ₹20 lakh crore, registering 114% achievement. Agency wise achievement vis-à-vis the target, as on 29 February 2024 is given below: GLC for Agriculture: Achievement vis-à-vis Target 2023-24* (₹crore) Crop Loan Term Loan Total Agency Target Ach. Target Ach. Target Ach. Commercial Banks 7,31,675 9,47,455 7,08,324 8,49,355 14,40,000 17,96,810 Rural Cooperative Banks 2,36,166 1,95,181 23,833 15,024 2,60,000 2,10,205 RRBs 2,46,428 2,24,628 53,571 52,356 3,00,000 2,76,984 Total 12,14,270 13,67,264 7,85,729 9,16,735 20,00,000 22,83,999 (Source: ENSURE Portal of NABARD) * Provisional Sub-targets for Animal Husbandry, Dairy & Fisheries within GLC Targets for Agriculture (₹crore) Sr. No. Activity Working Capital Term Loan Total i. Dairy 39,000 66,000 1,05,000 ii. Poultry 20,000 8,000 28,000 Sheep Goat, Piggery & iii. 63,000 72,000 1,35,000 Animal Husbandry- Others iv. Fisheries 18,000 7,000 25,000 Total 1,40,000 1,53,000 2,93,000 Agriculture Credit Target of Rs 22.50 lakh crore was proposed to GOI for the FY 2024-25, however, no announcement was made by GOI regarding the targets in the interim budget 2024-25. 54  For Internal Use only ii. Revised Mechanism for Monitoring Agriculture Credit Flow- ENSURE 2.0 Keeping in view the data requirements of the Ministry of Finance (MoF), development of Agri Stack by the Ministry of Agriculture and Farmers’ Welfare (MoAFW) and the continued stress upon data backed ACPs and PLPs by RBI, CPD in association with DDMABI has introduced 6 Additional GLC Returns on ENSURE 2.0. The returns are now live and banks are expected to upload the data on the portal from this Financial Year onwards. 3. Credit Planning i. PLP and SFP Preparation Credit planning plays a crucial role in channelizing the scarce resources to the critical areas for overall development of rural sector. For continued focus on credit planning, monitoring, and various developmental and business initiatives, NABARD has 479 District Development Managers (DDMs) operating across the country, with a focus on credit planning, monitoring of credit flow and coordination among various developmental agencies. During 2023-24, 729 PLPs for the year 2024-25 were prepared, covering 758 districts/UTs, which would guide the banks in preparation of credit plan from the perspective of supply side. Based on the PLPs, the State Focus Papers (SFPs), which highlight the credit potential, gaps & strategy for sectoral and infrastructural development for respective states, were prepared by all ROs. For FY 2024-25, the projection under Priority Sector lending was estimated to be ₹61.00 lakh crore, of which the share of total Agriculture was ₹26.25 lakh crore i.e. 43%. State Credit Seminars were organised in all the States and Union Territories to discuss ways to facilitate credit flow in the States as well bridge the gaps – both infrastructural and policy. Many suggestions made in the State Credit Seminars were considered by the State Governments for inclusion in the respective State Budget. ii. Memorandum on Credit Planning and Role of DDMs A Memorandum on Performance under credit planning and role of DDMs during the year 2022-23 was presented before the 154th meeting of Executive Committee of Board held on 30 November 2023. The memorandum highlighted the performance under various aspects of credit planning and monitoring exercise covering the role of DDMs, RO and HO. iii. Opening of Cluster Offices As approved by the Board of Directors, in its 238th Meeting, 19 Cluster Offices were rolled out during 2021-22, on a pilot basis, in three States viz. Punjab, Haryana and Telangana. During 2022-23, 10 Cluster offices were rolled out in Tamil Nadu covering 39 districts. A Study on ‘Evaluation of Cluster Offices in Punjab, Haryana and Telangana’ was assigned to Welingkar Institute of Management Development and Research, Mumbai through DEAR. Study Report on ‘Performance of Cluster Offices in Punjab, Haryana and Telangana’ was placed in 253rd Board of Directors Meeting held on 28 August 2023. The memorandum presented the summary of findings and recommendations of the Study. 55  For Internal Use only iv. Committee to review Institution of DDMs The Committee to review Institution of DDMs was constituted by Chairman, in December 2023 consisting of CGMs from select Head Office Departments and three Regional Offices, with a broad objective to look into the existing contours of DDM set up and suggest measures to strengthen the same so as to align them with the corporate objectives and expectations from the stakeholde₹ Terms of Reference (ToR) of the Committee covered aspects like parameters for posting of DDMs; tagging and DDM-R arrangements; identification of potential DDMs and their grooming architecture; training and capacity building; monitoring mechanism; administrative facilities; performance evaluation, expanding the scope and outreach and any other issues relating to functioning of DDMs. The report was handed to Shri Shaji K V, Chairman on 03 April 2024. v. Digitisation efforts Development of Portal for NAB DDM-MIS (with support from DIT) Efforts have been taken towards digitization of NABDDM-MIS so as to facilitate generation of consolidated reports by DDMs/ROs/HO. Piloted in 10 States & since stabilized. The portal has been rolled out in the remaining 19 States from April 2024 onwards. Digitalization PLP preparation (with support from DDMABI) Initiatives taken to digitalize the preparation of PLP with the support of DDMABI Modules being developed for capturing of SoF and Unit Cost in digital form, designing of formats of Annexures I, II & III, Banking Profile / District Profile and PLP chapters Envisaged that system generated PLPs would be prepared for the year 2025-26 onwards vi. Revisiting Circulars/Guidelines/Instructions Keeping in view the changing scenario, initiatives were taken to revisit various Circulars/Guidelines/Instructions as per the following: a. Instructions regarding Monitoring Visit of Senior Officers to DDM Offices was revised taking into account the changing role and responsibilities of DDMs. b. In order to reinforce NABARD's role in credit planning and monitoring at state level, a review of conduct of SLBC meetings and NABARD's participation in the meetings was conducted. A SoP outlining the expectations from NABARD at SLBC as well as BLBC/DCC meetings was forwarded to all ROs during 2023-24. c. In line with the emphasis of the Top Management on conduct of monitoring visits by senior officers to DDM offices and logical follow up thereagainst, revised instructions on fixation of timelines for submission of monitoring visit reports was forwarded to all ROs during 2023-24. 56  For Internal Use only 4. Parliamentary Committee Visits and Parliamentary Questions During 2023-24, following Parliamentary Committees held deliberations with various financial institutions, including NABARD, as detailed below: SN Parliamentary Committee Date Places Visited 1 Study Visit of the Committee on Government 23 August Assurances (2022-2023), Lok Sabha on the Thiruvananthapuram 2023 subject New Schemes in PPP Mode” 2 Study Visit of the Standing Committee on Social Justice and Empowerment (2023-24), 03 on the role of NABARD for the welfare and to November Kochi reduce the economic backwardness of the 2023 rural SCs, STs, Minorities and Divyangjan 3 Oral Evidence before Parliamentary Standing 17 Committee on Finance on subject ‘Providing November New Delhi credit to the agricultural and rural sector 2023 including appraisal of NABARD’s role’ 4 Oral Evidence before Parliamentary Standing 22 Committee on Finance on subject ‘Providing December New Delhi credit to the agricultural and rural sector 2023 including appraisal of NABARD’s role’ 5 Study Visit of the Standing Committee on 05 Subordinate Legislation for an informal January Goa discussion with the representatives of 2024 NABARD and IIFCL 6 Oral Evidence before Parliamentary Standing Committee on Finance on subject ‘Providing 11 January New Delhi credit to the agricultural and rural sector 2024 including appraisal of NABARD’s role’ 7 Study Visit of the Committee on 18 Empowerment of Women to Dhordo January Ahmedabad (Kachchh), Ahmedabad and Diu on the 2024 subject Women Self Help group 8 संसदीय राजभाष समिमि की िीसरी उप-समिमि द्वारा हररयाणा, एनबीएससी हररयाणा, एनबीएससी लखनऊ, कोलकािा, भुवनेश्वर, मवमभन्न लखनऊ, कोलकािा, राजकोट, अहिदाबाद, िुंबई एवं गोवा स्थिि केंद्र सरकार के मिमिया भुवनेश्वर, राजकोट, कायाा लयो का राजभाषा संबंधी मनरीक्षण / दौरा अहिदाबाद, िुंबई एवं गोवा During FY 2023-24, 196 Parliamentary Questions relating to FPOs, SHGs, Loan Waivers, Warehouse/Godown, KCC, etc. were replied by NABARD. 5. Meeting with Priority Sector Chiefs of Scheduled Commercial Banks and Small Finance Banks A meeting with the Priority Sector Chiefs of Scheduled Commercial Banks and Small Finance Banks was convened on 2nd February 2024 at NABARD, HO. The meeting was attended by 48 participants from 12 Public Sector Commercial Banks, 14 Private Sector Banks, 03 Small Finance Banks, 03 Foreign Banks. The central theme of the discussion was ‘Regional Disparity in Agriculture Credit’. Other agenda items that were discussed included Review of Agriculture credit performance during FY 2022-23, Innovations in Agriculture, Development of National Level Comprehensive Portal, etc. Banks highlighted various issues they face at the ground level, viz., Lack of proper land record data, Repayment issues in Collateral Free Loans, Issues relating to tenant farmers/landless cultivators, Regulation of Collateral Manage₹ 57  For Internal Use only 6. Celebration of 42nd Foundation Day CPD coordinated the 42nd Foundation Day which was celebrated on 12th July 2023 with a unique event organized at Pragati Maidan, New Delhi, graced by Shri Amit Shah, Hon’ble Union Minister for Home & Cooperation, Government of India as the Chief Guest and Dr. Bhagwat Kishanrao Karad, Hon’ble Minister of State for Finance, as the Guest of Honour in the gracious presence of Shri Gyanesh Kumar, Secretary, Ministry of Cooperation. 7. Conduct of BPM and Review of ROs Two Business Plan Meets were organized during 2023-24 to review the performance of HO Departments and ROs and suggest future plan of action. During 2023-24, 03 ROs were reviewed by Chairman and 04 ROs were reviewed by DMD. 8. Externally Aided Projects NABARD under financial cooperation with KfW is implementing “Integration of Watershed Development for Rehabilitation of Degraded Soils and Climate Change Adaption” progremme since 2016. The project is supported out of specially designated funds from German Financial Cooperation/ FC (“One World – No Hunger/ SEWOH”) with a total financial assistance of Euro 19.5 million from KfW. The programme incorporates issues of Climate Change Adaptation (CCA) in watersheds threatened by degradation, by improving soil health through climate sensitive investments. Similarly, under technical cooperation with GIZ, NABARD is supporting “Soil Protection and Rehabilitation for Food Security in India” (Prosoil) project in 5 districts of Maharashtra and 2 districts of Madhya Pradesh. The programme will be implemented till December 2024 with a total grant support of Euro 18.885 million from GIZ. The objective of the programme is promotion of soil conservation measures to improve crop productivity. Asian Development Bank is supporting NABARD for capacity builiding, policy formulation, etc on climate change under Technical Assistance programme. Programmes in pipeline: Techinical Collaboration programmes with GIZ on “Climate Adaptation, Resilience and Climate Finance in Rural India” (CAFRI II) and “Agroecological Orientation of NABARD NRM Portfolio” (NAB-SuATI) with total grant support of Euro 4.5 million from GIZ are in pipeline. The programmes aim to strengthen capacity of NABARD to mobilize climate finance for needs-driven, gender responsive climate adaptation- related measures as well as supporting implementation of JIVA programme. 58  For Internal Use only During 2023-24, NABARD interacted with various multi-lateral, bi-lateral organisations including the World Bank, Food and Agriculture Organisation, European Union, European Investment Bank, West African Development Bank, African Development Bank and also with country delegations from Vietnam, New Zealand, Netherlands, Congo, etc. to collaborate in the areas of mutual interest. NABARD is in talks with Asian Development Bank(ADB) and KfW to work in the areas of solar energy, compressed bio-gas, green finance, etc. 9. NABSAMVAD The NABSamvad portal was developed during the year to digitize conduct of all types of meetings by Departments of HO, ROs and TEs with the objective of having a data base of various meetings and easy retrieval of agenda and proceedings of the same. 10. Grievances /Complaints CPD is the Nodal Department looking after Grievance/Complaints received from various sources. During 2023-24,1685 grievances were received (as against 1521 in the FY 2022-23). Of these 1480 grievances were disposed as on 31 March 2024 (88% disposal rate). 180 appeals were received during the year, of which 173 were disposed as on 31 March 2024 (disposal rate 96%). 59  For Internal Use only 2. Subsidiaries and Strategic Investments A. Subsidiaries As on 31 March 2024, NABARD has seven subsidiaries viz. NABCONS, NABFINS, NABKISAN, NABSAMRUDDHI, NABVENTURES, NABFOUNDATION and NABSANRAKSHAN and the total share contribution stood at ₹604.63 crore. During the year, NABARD has received a dividend of ₹20.08 crore from the Subsidiaries (NABFINS, NABKISAN, NABSAMRUDDHI and NABCONS distributed a dividend of ₹10.20 Cr, ₹7.53 Cr, ₹2.26 Cr and ₹0.10 Cr respectively). NABSAMRUDDHI explored investment in Pass Through Certificate (PTC) by taking external borrowings to improve its yield. B. Strategic Investments As on 31 March 2024, NABARD has equity investment in ten Strategically important companies catering to agriculture and rural development, in the economy. During the year 2023-24, NABARD made a follow-on investment of ₹30 crore in Open Network for Digital Commerce (ONDC). The total investments in these ten companies stood at ₹1106.23 crore as on 31.3.2024. NABARD received a dividend of ₹23.69 crore from the following four Companies: i. SIDBI (20%, ₹10.64 crore) ii. AICIL (20%, ₹12.00 Cr) iii. MCX (191%, ₹0.72 Cr) iv. CSC e-governance (6%- ₹0.33 Cr) NABARD officials were posted as Board members in these institutions. C. Investments in Alternative Investment Funds (AIFs) NABARD invests in AIFs to drive venture investments in agriculture and rural development, promoting technological innovation and dissemination in these secto₹ During FY 2024, NABARD has committed ₹25 crore in Ubharte Sitaare Fund, ₹20 crore in Northern Arc Long Term Credit Fund, ₹20 crore in Vivriti Emerging Corporate Bond Fund, ₹15 crore in Stakeboat Capital Fund II, ₹10 crore in First Bridge India Growth Fund and ₹5 in Root Ventures II. NABARD’s commitment to AIFs stood at ₹729.02 crore in 31 AIFs. The outstanding investment stood at ₹414.51 crore. DSSI organised a Seminar on Seminar on "Harnessing Opportunities: NABARD Transforming Agri-Landscape” on 06 March 2024 at Mumbai. The Seminar was attended by various fund managers, startups, industry experts and incubation centres. The Seminar brought together key stakeholders in the agricultural sector to explore opportunities and emerging trends in the agri-business landscape, promote innovation quotient among agri- startups, explore funding opportunities and investment strategies facilitating collaboration and networking between investors, startups, and incubation centres. Workshop was also organised to boost the capabilities of Nominee Directo₹ 60