The Reserve Bank of India (RBI) will auction sovereign green bonds (SGrBs) worth Rs 16,000 crore in two parts. On Friday, the Ministry of Finance announced that the RBI will auction 5-year and 10-year green bonds worth Rs 4,000 crore each on 25 January and on 9 February, and this would be a uniform price auction.
The press communique by the Finance Ministry said, “The Government of India, in consultation with the Reserve Bank of India, has decided to notify the indicative calendar for issuance of SGrBs for the fiscal year 2022-23.”
“As announced in the Union Budget 2022-23, the Government of India, as part of its overall market borrowings, will be issuing Sovereign Green Bonds (SGrBs), for mobilising resources for green infrastructure,” the statement said, adding that the proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.
Sovereign Green bonds are financial instruments that generate proceeds for investment in environmentally sustainable and climate-suitable projects.
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Previously, the government had notified in the Half-yearly issuance calendar for marketable dated securities for the second half of the fiscal year 2022-23 on September 29, 2022. The government of India has since issued the Sovereign Green Bond Framework on November 09, 2022. The framework says that all eligible green expenditures will include public expenditure in the form of investment, subsidies, grants-in-aid or tax foregone, and R&D expenditures in public sector projects that help reduce the economy’s carbon intensity.
With the growing need to fund climate mitigation and adaptation activities, several governments around the world have issued sovereign green bonds. A sovereign green bond is a debt instrument issued by the central or state government to raise funds from investors with the promise that the funds raised will be used for climate or ecosystem-related activities.