Govt to raise Rs 20K crore via green bonds: Finance Ministry

NEW DELHI: The government will raise Rs 20,000 crore through green bonds in the second half of this financial year, as part of its borrowing of Rs 5.86 lakh crore.  The Centre is working on the contours of the green bond framework.

“We will issue green bonds for a small amount of Rs 20,000 crore this fiscal. We are in the process of finalising the framework for these bonds,” a senior finance ministry official told TNIE. He further added that the timeline for the issuance of these bonds hasn’t yet been decided.

According to the sources, the green bond framework will contain the details of the projects to be financed.

“As we are not making any additional borrowing, we have to borrow within the borrowing limits as per the budget. So, only those schemes will be financed that already fall within the ambit of the budget,” the source added.  

“It’s not necessary that the issue of these bonds will be announced, along with the borrowing for the second half. There are certain formalities with which have to comply before launching these bonds,” the official stated.

Finance Minister Nirmala Sitharaman in her budget speech announced the Centre’s plan to issue green bonds in the financial year 2022-23 (FY23) as part of its overall market borrowing to mobilise resources for green infrastructure.

Another source said the government will look at the pricing of bonds too. Green bonds should not be costlier than normal bonds. Depending upon the response, the government may consider raising funds through them from foreign investors, he said.

Meanwhile, the government sources said with the issuance of green bonds, the market will get diversified as at present there are investors for normal bonds only. The diversification of the market will help in getting competitive prices. 

NEW DELHI: The government will raise Rs 20,000 crore through green bonds in the second half of this financial year, as part of its borrowing of Rs 5.86 lakh crore.  The Centre is working on the contours of the green bond framework. “We will issue green bonds for a small amount of Rs 20,000 crore this fiscal. We are in the process of finalising the framework for these bonds,” a senior finance ministry official told TNIE. He further added that the timeline for the issuance of these bonds hasn’t yet been decided. According to the sources, the green bond framework will contain the details of the projects to be financed. “As we are not making any additional borrowing, we have to borrow within the borrowing limits as per the budget. So, only those schemes will be financed that already fall within the ambit of the budget,” the source added.   “It’s not necessary that the issue of these bonds will be announced, along with the borrowing for the second half. There are certain formalities with which have to comply before launching these bonds,” the official stated. Finance Minister Nirmala Sitharaman in her budget speech announced the Centre’s plan to issue green bonds in the financial year 2022-23 (FY23) as part of its overall market borrowing to mobilise resources for green infrastructure. Another source said the government will look at the pricing of bonds too. Green bonds should not be costlier than normal bonds. Depending upon the response, the government may consider raising funds through them from foreign investors, he said. Meanwhile, the government sources said with the issuance of green bonds, the market will get diversified as at present there are investors for normal bonds only. The diversification of the market will help in getting competitive prices.