Sovereign Green Bonds: How India Funds Green Public Projects
Last updated: 2026-11-13 · MockMentor
Sovereign Green Bonds (SGrBs) are Government securities whose proceeds go only to green public sector projects. They were announced in the Union Budget 2022-23, the framework came on 9 November 2022, and the first issue was in January 2023. The RBI issues them on behalf of the Government.
In one line: regular Government bonds with an earmarked use: the money funds projects that cut the economy's carbon intensity.
At a glance
| Item | Details |
|---|---|
| Announced | Union Budget 2022-23 |
| Framework | 9 November 2022 |
| First issue | January 2023 |
| Ministry | Finance (Department of Economic Affairs) |
| Issuer | RBI |
| Tenors | 5 and 10 years at first; 30 years later |
| Foreign investors | Open under the Fully Accessible Route, no limit |
Not eligible
Fossil fuel projects, nuclear power, large hydro above 25 MW, landfills, direct waste incineration, and alcohol, weapons, tobacco, gaming and palm oil. CNG is allowed only for public transport.
Key facts
- Proceeds go into the Consolidated Fund of India and must be allocated within 24 months.
- An annual allocation and impact report is published, and the use is audited by the CAG.
- Greenium: the lower yield investors accept on a green bond compared with a regular G-Sec.
- Aligned with the International Capital Market Association's Green Bond Principles.
Possible exam questions
- Can sovereign green bonds meaningfully finance India's climate goals? Discuss.
- What is greenium, and why has it been small for Indian green bonds?
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