In the Union Budget of 2022-23, the Indian govt. decided to issue Sovereign Green Bonds (SGrB) as a part of their borrowing. SGrB are the type of bond instruments, the issue proceeds from this will specifically be utilized for financing green projects in the public sector, unlike other bonds that can be utilized for any other purpose.
In Jan 2023, RBI issued an indicative calendar for the issue of SGrB of Rs. 16,000 crores for the FY 2022-23. This has been issued by the RBI as it is a debt manager of the Govt. of India and accordingly, it will carry out the auction.
Features of the SGrB issuance-
1. These are to be issued through Uniform Price Method i.e. sold at the same price.
2. Non-competitive bidding is reserved for retail investors - 5% of the notified sale amount.
3. These are eligible for the Statutory Liquidity Ratio (SLR) purpose, repo transactions, and when-issued trading.
4. SGrB are designated as specified securities under the "Fully Accessible Route" for investment in govt. securities by non-residents, which means there is no limit on overseas investment.
As these bonds are issued by the Govt. of India, will carry no or zero risk. Thus, will be issued at a premium or lower interest rate. It means the rate of interest offered by green bonds is lower than other debt instruments and accordingly, it is going to facilitate access to cheaper capital for environmentally friendly projects.
The indicative calendar for the issue of the SGrB for the FY 2022-23 is under
