Profile
Settings
Refer your friends
Sign out
About Green Bonds:
- Debt instruments are issued by governments, corporations, and multilateral banks to raise funds for environment-friendly projects.
- Used exclusively for projects that reduce emissions and enhance climate resilience.
- Offer lower yields than conventional bonds, benefiting from a green premium (“greenium”) which helps issuers raise funds at lower costs.
- Attract investors looking for stable, long-term returns and those with green financing mandates.
Green Bonds in India:
- Sovereign Green Bonds (SGrBs): Issued by the Government of India under a framework introduced in 2022.
- Since 2022-23, India has issued SGrBs eight times, raising ₹53,000 crore.
- Government Allocation of Green Bond Proceeds (2024-25):
- Electric locomotive manufacturing (Ministry of Railways).
- Metro rail projects.
- Renewable energy projects (including National Green Hydrogen Mission).
- Afforestation under the National Mission for a Green India.
- Importance of Green Bonds
- Help finance India’s transition to a sustainable and low-carbon economy.
- Strengthen climate finance and support clean energy, transportation, and afforestation projects.
- Encourage investment in green infrastructure by offering financial incentives and better reporting practices.
Why in News?
- Like several emerging markets, India also turned to sovereign green bonds to help fund its transition to a low-carbon economy, but investor demand remains weak.
