The government is probably to launch the green bond in the second half of the current financial year. To make them attractive, the government may offer a little better yield compared with normal bonds of corresponding maturity or bundle in some incentives.
The bonds are expected to be medium to long-term bonds and a major focus on the renewable energy sector said the government official. The framework for sovereign green bonds is expected to be finalized in a few months by the Centre and the Reserve Bank of India (RBI). “Work on the draft framework is underway, and it is scheduled to be completed by the end of June,” a senior finance ministry official told.
More than USD 500 billion in green bonds in line with Climate Bonds Market Intelligence, were issued globally in 2021. Total issuance is expected to reach USD 5 trillion by 2025 as ESG (environmental, social, and governance) investing increases.
Green bonds are likely to attract new investors, relieving pressure on the debt market from excessive government borrowings in the current fiscal year.