What is Green Finance?
How does it work?
Financial institutions
can do it by providing loan to individuals, small businesses and large organizations
in an environmentally friendly attitude. For example, loans may be used to
support the propagation of renewable energy. A lender should use this loan in
order to finance the growth of a solar power plant that generates power from
the sun utilizing solar panel. Green financiers also prefer the
business of wind power generation. These organizations
build up wind farms using large wind turbines onshore and offshore in order to
capture wind and generate power.
Power generating
companies that use conventional source of fuel like fossil, coal, gas etc. are
not eligible to participate in green finance. For example, during
generating power, coal releases huge amount of emissions in the air which is
very harmful and dangerous for environment. As a result, power generating
companies that use coal are not eligible to participate for a green finance.
Although, clean coal emits very little emissions but may never be categorized
as a green investment.
Offering environmental incentives to market participants, green finance may also be encouraged. Green finance has a very proactive format which is allowing small businesses to participate who are not directly engaged in clean energy business. For example, vehicles selling companies concentrated in selling cars which are designed using a hybrid fuel integrated both fossil fuels and renewable energy.
Green energy companies contributing to
develop green technologies are hoping to generate huge amount of
power of world in future.