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What Are Sovereign Green Bonds And How Can You Invest In Them?

Here's all you need to know about Sovereign Green Bonds in India.

Sovereign Green Bonds In India

The Reserve Bank of India (RBI) recently auctioned its maiden Sovereign Green Bonds worth ₹8,000 Crore as part of the ₹16,000 Crore Sovereign Green Bonds to be issued in the current financial year. The second Sovereign Green Bonds auction will be conducted today, February 9, 2023.

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Proceeds From Sovereign Green Bonds Auction

The government will use the proceeds from this auction for environment-friendly projects like solar, wind, small hydropower projects, etc.

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Sovereign Green Bonds- Meaning

Green bonds, or climate bonds, are fixed interest-bearing financial instruments issued by a sovereign entity, inter-governmental groups or alliances, and corporates. The proceeds of these bonds are used for projects which are environmentally sustainable.

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Sovereign Green Bonds- Importance

Sovereign Green Bonds have become important financial instruments over the years that help in dealing with the threat and challenges of climate change. As per the International Finance Corporation, climate change is a threat to communities and economies.

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Sovereign Green Bonds- Importance (Continued)

Tackling these challenges needs a lot of financing and hence, it is important to connect environmental projects with investors and capital markets to move capital towards sustainable development. Sovereign Green Bonds act as this connection.

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Sovereign Green Bonds- Benefit For Investors

Sovereign Green Bonds act as an opportunity for investors to engage in good practices and influence the business strategy of the bond issuers. These bonds act as a hedge against climate change risks while achieving at least similar returns on their investment.

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Sovereign Green Bonds- How To Invest?

To invest in Sovereign Green Bonds, investors can visit the RBI Retail Direct website. One can also invest in Sovereign Green Bonds through their broking demat account.

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