The Reserve Bank of India will hold an auction for green bonds

According to the central bank, the Reserve Bank of India will hold a uniform price auction for 5-year and 10-year green bonds worth 40 billion rupees each on January 25 and February 9. India’s Reserve Bank (RBI)

In January and February, the Reserve Bank of India will hold two 8,000-crore auctions for green bonds

In two installments, the Reserve Bank of India (RBI) will auction $16,000 crore worth of sovereign green bonds (SGrBs). On January 25 and February 9, the RBI will hold a uniform price auction for 5-year and 10-year green bonds totaling 4,000 crores each.

The emphasis is on public-sector projects

The proceeds will be used to fund public-sector projects that reduce the economy’s carbon footprint. As announced in the Union Budget 2022-23, the central government will issue Sovereign Green Bonds as part of its overall market borrowings to mobilize resources for green infrastructure.

What exactly are Green Bonds?

Companies, nations, and international organizations all offer green bonds, which guarantee fixed-income payments to investors while only funding initiatives that benefit the environment or the climate.

The initiatives could involve, among other things, green buildings, sustainable transportation, and renewable energy.

The proceeds from these bonds will be used to fund green projects. In contrast to standard bonds, the proceeds of which can be used for a variety of purposes at the discretion of the issuer.

Since the market’s launch in 2007, there have been cumulative issuances on the global green bond market totaling more than USD 1 trillion.

According to the London-based Climate Bonds Initiative, by the end of 2020, 24 national governments would have issued sovereign green, social, and sustainability bonds worth a total of USD 111 billion.

What Does a Sovereign Guarantee Mean for Green Bonds?

Governments and authorities are sent a strong signal of intent about climate change and sustainable development by sovereign green issuance.

It will catalyze domestic market development and give institutional investors a boost.
It will offer local issuers benchmark pricing, liquidity, and a demonstration effect, supporting the expansion of a local market.

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The Green Bonds’ main goal is

In the Budget 2022, the Finance Minister stated that the government plans to issue sovereign green bonds to raise money for green infrastructure.

The proceeds will be used to fund public-sector projects that reduce the economy’s carbon footprint

The declaration coincides with India’s pledge to achieve net-zero carbon emissions by 2070.

How can I invest in Reserve Bank of India government bonds?

Applications for the Bonds in the form of Bond Ledger Accounts will be accepted at the approximately 1600 agency bank branches and SHCIL branches that have been designated for this purpose. The Bonds will be issued at par, or 100.00 percent, in rupees. A minimum amount will be required to issue the bonds.