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Why in the News?
Recently, the framework of the Sovereign Green Bonds was approved by the Centre.
About
Green Bonds:
- A green bond is a fixed-income instrument designed specifically to support specific climate-related or environmental projects.
- Green bonds finance projects aimed at energy efficiency, pollution prevention, and sustainable development.
- Green bonds come with tax incentives such as tax exemption and tax credits, making them a more attractive investment compared to a comparable taxable bond.
- To qualify for green bond status, a bond is often verified by a third party such as the Climate Bond Standard Board.
Image Source: Livemint
Significance of Framework:
It will strengthen India’s commitment towards its Nationally Determined Contribution (NDCs) targets, adopted under the Paris Agreement.
It will attract global and domestic investments in eligible green projects.
The proceeds from the issuance of such bonds will be deployed in Public Sector projects which help in reducing the carbon intensity of the economy.
