Sowing Seeds, Awaiting Growth: Green Bonds’ Fate in 3 Years

The fate of India's Sovereign Green Bonds (SGrBs), launched to finance green projects, will be determined in three years when the government will review their performance. Despite issuing ₹36,000 crore of green bonds since 2022, poor investor sentiment and low green premiums have checked their succe...

The fate of India's Sovereign Green Bonds (SGrBs), launched to finance green projects, will be determined in three years when the government will review their performance. Despite issuing ₹36,000 crore of green bonds since 2022, poor investor sentiment and low green premiums have checked their success. High yield expectations at recent auctions led to unsold bonds worth ₹7,443 crore. The government aims to raise ₹20,000 crore in SGrBs in FY25 in four tranches that will support projects like electric locomotives, metro lines, and renewable energy projects. Secondary market illiquidity and lack of incentives for investors, however, continue to be problems. Experts advise cooperation with multilateral bodies like the World Bank to increase credit ratings and confidence among investors. The forthcoming three years are going to play a crucial role in determining whether SGrBs can achieve India's sustainability objectives. Source: Indian Express, Economic Times