Everything you need to know about Sovereign Green Bonds

Context for Indian Sovereign Green Bonds

During the 2021 Climate change conference, India announced its ambition and committed on addressing the challenges posed by climate change with the following targets:

  1. Reach 500GW non-fossil energy capacity by 2030

  2. 50% of its energy requirements from renewable energy by 2030

  3. Reduction of total projected carbon emissions by one billion tonnes from now to 2030

  4. Reduction of the carbon intensity of the economy by 45 per cent by 2030, over 2005 levels

  5. Achieving the target of net zero emissions by 2070

In the Union Budget 2022-23, Finance Minister announced the issue of Sovereign Green Bonds for mobilizing resources for green infrastructure which shall be deployed in public sector projects to help reduce the carbon intensity of the economy.

The Green Bond Framework

  • With Government of India as a Green Bond issuer, The Framework applies to all sovereign Green Bonds issued by the Government of India.
  • Payments of principal and interest on the issuances under this Framework are not conditional on the performance of the eligible projects. Investors in bonds issued under this Framework do not bear any project related risks.

  • Based on the key recommendations of International Capital Market Association (ICMA) Green Bond Principles (2021), The following four core components as outlined by ICMA green bond principles are:

i. Use of proceeds;

ii. Project evaluation and selection;

iii. Management of proceeds; and

iv. Reporting.

Core Components of the Framework

1. Use of proceeds

A ‘green project’ classification is based on the following principles:

• Encourages energy efficiency in resource utilization

• Reduces carbon emissions and greenhouse gases

• Promotes climate resilience and/or adaptation

• Values and improves natural ecosystems and biodiversity especially in accordance with SDG principles,

Government of India will use the proceeds raised from Sovereign Green Bonds(SGrB) to finance and/or refinance expenditure (in parts or whole) for eligible green projects falling under ‘Eligible Categories’ defined in Table below

Green Project Category Environmental Objective Eligibility Criteria
Renewable Energy Climate Change Mitigation Investments in solar/wind/biomass/hydropower energy projects that integrate energy generation and storage
Energy efficiency Climate Change Mitigation Design and construction of energy-efficient and energy- saving systems and installations ,Supporting public lighting improvements (e.g. replacement with LEDs) and construction of new low-carbon buildings as well as energy-efficiency retrofits to existing buildings and Projects to reduce electricity grid losses.
Clean transport Climate Change Mitigation Promote public transportation including its electrification and transport safety like EV and its infrastructure
Climate Change Adaption Climate Change Mitigation Projects aimed at making infrastructure more resilient to impacts of climate change, as well as investments in information support systems, such as climate observation and early warning systems.
Sustainable Water and waste management Climate Change Mitigation Promoting water efficient irrigation systems, Installation/upgradation of wastewater infrastructure including transport, treatment and disposal systems, Water resources conservation, Flood defence systems.
Pollution Prevention and Control Climate Change Mitigation, Environment protection Projects targeting reduction of air emissions, greenhouse gas control, soil remediation, waste management, waste prevention, waste recycling, waste reduction and energy/emission-efficient waste-to-energy
Green Buildings Climate Change Mitigation Projects related to buildings that meet regional, national or internationally recognized standards or certifications for environmental performance.
Sustainable Management of Living Natural Resources and Land Use Natural Resource Conservation Environmentally sustainable management of agriculture, animal husbandry, fishery and aquaculture.Sustainable forestry management including afforestation / reforestation, Support to certified organic Farming, Research on living resources and biodiversity protection.
Terrestrial and Aquatic Biodiversity Conservation Biodiversity Conservation Projects relating to coastal,marine environments, biodiversity preservation, including conservation of endangered species, habitats and ecosystems.

2. Process for Project Evaluation and Selection

  • Ministry of Finance has constituted a “Green Finance Working Committee” (GFWC) with representation from relevant line ministries and chaired by Chief Economic Adviser, Government of India. GFWC will meet at least twice a year to support Ministry of Finance with selection and evaluation of projects and other relevant work related to the Framework. Initial evaluation of the project will be the responsibility of the concerned Ministry/Department in consultation with experts.

3. Management of Proceeds

  • Ministry of Finance will set up a dedicated information system with a view to maintaining a complete Green Register including the details of the green bond issuance, proceeds generated, allocations made to eligible projects including information about the eligible projects (summary of the project details, allocation of proceeds to each project, expected climate impact and the extent of unallocated proceeds, both aggregate as well as project-wise).

4. Reporting

  • Government will give an annual update which shows the status of allocation of the green bond proceeds as well as the environmental impact of projects funded by the proceeds. and there and any material changes thereafter and will be brought under the supervision of Green Finance Working Committee(GFWC)

Link to the full report


@Meher_Smaran - Are these available to Retail Folks as well. If Yes, where and how to invest


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They are. You can invest in SGrBs through Coin just like G-Secs. First issue of SGrBs opens for subscription on 25th January: Issuance calendar for Sovereign Green Bonds (SGrBs)



It is going to be interesting to see at what yield these securities going to be listed compared to 5Y & 10Y GSec?
Anyone knows what is global trend for Green Bonds in terms of yield compared to similarly rated normal bonds? Is it less , equal or more?

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Looks like war bonds sold during WWII in US :face_with_spiral_eyes:


I can’t see in the coin … what time will it be available ?


This tranche of SGrBs is not available on the non competitive bidding platform because the exchnages weren’t ready. Should be available from next issue onwards and will be available on Coin too.

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@Meher_Smaran @ShubhS9 are there only 2 tranche available for soveregin-green-bonds? i see in the calender till 9th Feb 2023 only.

Also, the same soveregin-green-bonds are listed in january are they part of pledge securities?

Yes, currently there are only two tranches announced.

These are not listed on the exchanges yet. You will be able to pledge once these are approved for pledging by the Clearing Corporation.

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Whats the expected return on these bonds

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The cut-off yield for the Green Bonds issued on 25th January was 7.1% for the 5-year and 7.29% 10-year bond: Press Release


Paid half yearly?

Yes, the interest is paid semi-annually and will be credited directly to your primary bank account.

since next tranche opening up tomorrow , does zerodha / coin providing any provision to buy ?

Also , According to you will it considered under cash component ( for collateral )

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Hi … Still not able to see them in zerodha

@Meher_Smaran The last tranche was on 9th feb… any idea for next tranche? And will it be available on coin?

@Meher_Smaran @ShubhS9

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Hi @pankushri, RBI hasn’t yet released schedule for further issues of Sovereign Green Bonds, will update it on this post when they do: Issuance calendar for Soveregin Green Bonds (SGrBs)

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I can see them open in zerodha right now.
Can they be pledged ? If yes, which component?