Sovereign Green Bonds: In the month of December, the Reserve Bank of India Sovereign Green Bond (Sovereign Green Bonds Preparing to sell the first batch of Dedicated Green Funds are in talks with foreign portfolio investors, local banks, insurance companies for auction of sovereign green bonds in mid-December. The government can issue these bonds at discount rates of 2 to 5 basis points against the yield of 10-year bonds.
The government can raise $ 2 billion i.e. Rs 16,000 crore by March 31, 2023, through sovereign green bonds. The government is going to raise $175 billion through loans under the borrowing program in the current financial year. The money to be raised from Sovereign Green Bonds will help in reducing the cost of borrowing. Foreign investors can buy sovereign green bonds through the fully accessible route.
Earlier, Finance Minister Nirmala Sitharaman on Wednesday approved the country’s first Sovereign Green Bonds Framework. The money raised by issuing Sovereign Green Bonds will be invested in public sector projects. Green bonds can be issued in the second half of this financial year. These bonds will be of long duration keeping in mind the green infrastructure projects. Presenting the budget for 2022-23, Finance Minister Nirmala Sitharaman had talked about raising resources for green projects by issuing sovereign green bonds.
Sovereign Green Bonds are financial instruments used to raise funds to invest in environmentally sustainable and climate-resilient projects. Sovereign Green Bonds reduce the cost as compared to regular bonds.