RBI to issue green bonds in two tranches of Rs 8,000 crore each
The Reserve Bank of India on 6 January said that maiden Sovereign Green Bonds (SGrBs) would be issued in two tranches of Rs 8,000 crore each on January 25 and February 9.
An overview of the news
The central government is issuing these sovereign green bonds as part of its total market borrowing. These bonds are being issued to promote green infrastructure.
The Central Government had released the framework of Sovereign Green Bond on 9 November 2022.
Sovereign green bonds worth Rs 8000 crore will be issued on January 25, 2023. In this, green bonds worth Rs 4000 crore will be issued for 5 years and sovereign green bonds worth Rs 4000 crore will be issued for 10 years.
Apart from this, Sovereign Green Bonds worth Rs 8000 crores will be issued as the next instalment on 9 February 2023. In which green bonds worth Rs 4000 crore will be issued for 5 years and sovereign green bonds worth Rs 4000 crore will be issued for 10 years.
What are Sovereign Green Bonds?
These are bonds that are used by the government to finance projects that have a positive impact on the environment.
The Green Bond was launched in 2007 by the European Investment Bank and the World Bank.
A Green Bond is an instrument that helps in raising funds for green projects.
Funds from these bonds will be invested in public sector projects that help reduce carbon intensity.
These bonds fall into 9 broad categories. Some of these are projects like renewable energy, energy efficiency, clean transportation, green building.
The government aims to attract foreign investors through these bonds.
Being asset linked, it becomes easier for the government to raise money through these bonds.
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