Indian government to issue sovereign green bonds worth INR 24,000 crore
According to official, the government expects lower yields on green bonds, as otherwise issuing them makes little sense. On Monday, the yield on the 10-year sovereign bond closed at 6.85 percent.
India has plans to issue at least INR 24,000 crore ($3.3 billion) in sovereign green bonds to begin transitioning to a low-carbon economy, according to sources with knowledge of the matter.
According to available information, the debut sale may take place in the first half of the fiscal year that starts on April 1, 2022 and the decision to issue more green debt depends on the response to the initial issuance .
Chintan Haria, head of products and strategy at ICICI Prudential Asset Management Co, India’s third largest asset manager stated that it will look into sovereign green bonds in every possible way if they coincide with investor portfolios with a good risk-return trade-off.
In its first foray into the green bond market, India plans to finance renewable energy projects to help it achieve net-zero emissions by 2070.
The government expects lower yields on green bonds, as otherwise issuing them makes little sense, the officials said. On Monday, the yield on the 10-year sovereign bond closed at 6.85%.
Kotak Asset Management Co. chief investment officer for fixed income Lakshmi Iyer commented that even though the bond has a low yield, it may be more appealing to foreign investors than local ones due to their appetite for this category of bonds.
A global boom in sustainable investments has led to the planned issuance. India is the world’s third largest emitter of greenhouse gasses. To check on this, the country has a goal of more than quadrupling its renewable energy generation capacity by 2030.
As per Bloomberg’s data, Indian renewable energy companies raised debt worth INR 17.6 billion in February, the highest amount raised in nearly a year.
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