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Investment in Green Bonds in 2024: Types, Listing, and Significance in India

updated on 165 Comments on Investment in Green Bonds in 2024: Types, Listing, and Significance in India

In the ever-changing world of sustainable finance, green Bonds are the only Bonds that have emerged as a compelling financial instrument that encourages positive environmental impact. The Government of India is taking proactive measures to curb the fiscal Deficit of India. Resulting in Green Bonds being introduced as a financial tool for funding environmentally beneficial projects.

In this Blog, we will deeply understand What are green Bonds, their types, the list of Green Bonds, and their significance.

What are Green Bonds?

Green Bonds are debt instruments that are issued to fund initiatives related to the environment like eco-friendly agriculture projects, renewable energy projects, clean transportation projects, and other environmental infrastructure projects. Investors who wish to support the environment through any means can invest in green Bonds, which will make our country a more sustainable and eco-friendly economy.

Latest news of Green Bonds in 2024

India Infrastructure Finance Company Ltd (IIFCL) is gearing up to raise Rs 2,000 crore through its inaugural green bonds over the next half-year to support sustainable projects. The funding strategy may involve a combination of both domestic and foreign issuances, contingent upon the cost of funds. In a similar vein, the State Bank of India (SBI) recently secured $250 million (approximately Rs 2,000 crore) by issuing green bonds with a maturity date set for 2028 through private placement. Since 2015, numerous Indian businesses and the government have actively advocated for and facilitated lending and financing through green bonds.

The heightened interest in green bonds prompted the Government of India to introduce a Green Bond Framework in 2022, subsequently releasing the initial tranche of its inaugural sovereign green bond valued at Rs 80 billion (equivalent to $980 million). Furthering this commitment, on February 9, 2023, the government announced plans for an additional issuance of Rs 80 billion ($968 million) in sovereign green bonds.

India’s financial and fiscal environment is experiencing swift and transformative shifts, propelled by the government’s proactive initiatives to control the nation’s fiscal deficit. A notable achievement in this transformation is the inception of green bonds, serving as a creative financing tool for projects that bring about environmental benefits.

Types of Green Bonds in India

1. Green Revenue Bonds – These bonds are typically issued by governmental entities, including state, central governments, or municipal bodies. In this arrangement, a dedicated cash flow, such as toll receipts or excise duty, is offered as collateral to investors.

2. Green Project Bonds – These Bonds are focused primarily on financing, particularly environmentally friendly projects in order to provide investors with a direct link to the success and outcomes of this kind of initiative.

3. Green Security Bonds – These securities are offered to the investors for multiple smaller qualifying green projects. And it also offers the investor great potential for diversification through the combined cash flows of various projects.

List of Green Bonds in India 2024

Sr. No.IssuerDate of IssueDate of MaturityAmount (Rs. In crs.)Coupon (%)TenureISINs
1L&T Infrastructure Finance Company Ltd29/06/201718/11/20246677.59%7.39INE691I07DZ9
 2Indian Renewable Energy Development Agency Limited03/01/201903/01/20292758.51%10.01INE202E07260
 3Indian Renewable Energy Development Agency Limited17/01/201917/01/20295908.47%10.01INE202E07278
 4Ghaziabad Nagar Nigam31/03/202106/04/20251508.10%4.02INE0GVF24014
06/04/20265.02INE0GVF24022
06/04/20276.02INE0GVF24030
06/04/20287.02INE0GVF24048
06/04/20298.02INE0GVF24055
06/04/20309.02INE0GVF24063
06/04/203110.02INE0GVF24071
 5Yarrow Infrastructure Private Limited01/07/202101/07/20245816.49%3INE001W07011
 6Priapus Infrastructure Limited01/07/202101/07/2024166.49%3INE964M07011
 7Rattanindia Solar 2 Private Limited01/07/202101/07/20242276.49%3INE935V07012
 8Malwa Solar Power Generation Private Limited01/07/202101/07/20241976.49%3INE999X07014
 9Citra Real Estate Limited01/07/202101/07/2024196.49%3INE969M07010
 10Sepset Constructions Limited01/07/202101/07/20241976.49%3INE961M07017
 11Fermi Solarfarms Private Limited28/02/202228/02/20253376.75%3INE404X07015
 12Clean Sustainable Energy Private Limited28/02/202228/02/20253346.75%3INE00JT07017
 13Avaada Sataramh Private Limited28/02/202228/02/20252706.75%3INE0CSU07013
 14Avaada Solarise Energy Private Limited28/02/202228/02/20254996.75%3INE07H107012
 15Indore Municipal Corporation20/02/202320/02/20262448.15%3INE00QS24019
20/02/20285INE00QS24043
20/02/20307INE00QS24027
20/02/20329INE00QS24035
 16Mindspace Business Parks Reit15/03/202313/04/20265508.02%3.09INE0CCU07074
 TOTAL  5333   
Source – https://www.sebi.gov.in/statistics/greenbonds.html

Benefits of Green Bonds

1. Environmental Influence – The significance of green bonds lies in their crucial contribution to financing initiatives that promote a future characterized by sustainability and environmental friendliness, encompassing projects like renewable energy infrastructure and efforts towards clean transportation.

2. Financial Gains – Investors engaging in green bonds not only play a part in fostering positive environmental impact but also have the potential for financial profit. The green bond market has shown competitive returns, drawing an increasing number of investors committed to environmental considerations.

3. Corporate Accountability – The issuers of green bonds bolster their corporate reputation by demonstrating a dedication to environmental responsibility. This not only appeals to investors but also has the potential to positively shape consumer attitudes.

4. Market Reach and Liquidity – Green bonds frequently experience heightened interest from investors in search of socially responsible investment options, resulting in improved liquidity and market accessibility for issuers.

Conclusion

In today’s complicated financial world, green bonds offer hope for a greener future. By understanding the different types, the careful listing process, and the big benefits they bring, both investors and issuers can help make the world more eco-friendly and resilient. Exploring green bonds isn’t just about money, it’s a group effort to take care of the environment and invest responsibly.

Apart from investing in bonds, one can also consider to invest in small cap funds. Read here to know more about small cap funds.

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165 Comments

  1. Green bonds have always been a safe and secure investment option. This blog seems very relevant to explain the importance of green bonds investments

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