Center to issue green bonds in two tranches of ₹8,000 crore each

“As announced in the Union Budget 2022-23, the Government of India, as part of its overall market borrowings, will issue Sovereign Green Bonds (SGrBs) to raise resources for green infrastructure. The proceeds will be plowed into public sector projects that help reduce the carbon intensity of the economy,” the ministry said in a statement.

Government will auction 5 year and 10 year green bonds 4,000 crore each on January 25 and February 9, and it will be a similar price auction.

“Accordingly, in the half-yearly issue calendar for marketable dated securities for the second half of the financial year 2022-23 on September 29, 2022, it was notified that the SGrBs for the total amount 16,000 crore will be released. The Government of India has since issued the Sovereign Green Bond Framework on November 09, 2022,” it said.

The Center in consultation with the Reserve Bank of India has decided to notify an indicative calendar for the issuance of SGrBs for the financial year 2022-23.

The features of SGrB issuance will be as follows,

i) Mode of Issuance: The SGrBs will be issued through a par value auction.

ii) Non-Competitive Bidding Facility: Five per cent of the notified amount of the sale shall be reserved for retail investors specified under the ‘Scheme for Non-Competitive Bidding Facility in Auction of Government of India Dated Securities and Treasury Bills’.

iii) Eligibility for repurchase transactions: SGRBs will be eligible for repurchase transactions as per the terms and conditions specified in the Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018, as amended from time to time.

iv) Eligibility for Statutory Liquidity Ratio (SLR): SGRB will be counted as eligible investment for SLR purpose.

v) Underwriting: Underwriting in the auction of SGrBs by Primary Dealers will be in accordance with the “Revised Scheme of Underwriting Commitment and Liquidity Support” issued by the Reserve Bank vide circular No.RBI/2007-08/186 dated November 14. 2007, as amended from time to time.

vi) When Issued trading: SGrBs will be eligible for “When Issued” trading in terms of the guidelines on ‘When Issued Market Transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular dated July 24, 2018. as amended from time to time.

vii) Tradability: The SGRBs shall be eligible for trading in the secondary market.

viii) Investment by non-residents: SGRBs will be designated as specified securities under the ‘Fully Accessible Route’ for investment in Government securities by non-residents.