The Indian government plans to sell its first green bonds at a ‘greenium,’ with yields lower than market rates, and has identified 400 billion rupees ($4.92 billion) in projects that may be supported with the profits. The government intends to raise 160 billion rupees through green bonds for the current fiscal year, which ends March 31, with the first tranche of 80 billion rupees to be auctioned next week.
The earnings would be used for ‘India’s green’ initiatives such as solar electricity, wind power, and minor hydro projects, all of which would assist to lessen the economy’s carbon footprint. Based on the robust reaction and interest from both global and local investors, the government expects a green premium, or ‘greenium,’ on prices to drive yields 5-10 basis points (bps) below sovereign bonds.
According to the sources,in December, investors expressed interest during a meeting with Ministry of Finance in which top 50 foreign portfolio investors (FPI) were also present, and those with a green mandate inquired about domestic registration requirements.
The Reserve Bank of India (RBI) said that certain securities will not be subject to FPI limitations. It would sell five-year and ten-year green bonds worth 40 billion rupees apiece. The government’s five-year bond yield of 7.38% in 2027 was 7.16%, while the benchmark 10-year bond yield was 7.35%.
Domestic banks and mutual funds may have little demand since they do not have a distinct green mandate. The projects chosen are more than twice as large as the current fiscal year’s fundraising goal so the money can be allocated to other projects if the selected ones are unable to utilize proceeds this year.
This is a syndicate News Feed; fake checked and edited by Clean-Future Team