HDFC Mutual Fund files for India’s first sovereign green bond MF

SGrBs are bonds issued by the Government of India (GoI), the proceeds of which will be invested in public sector projects that help reduce the carbon intensity of the economy.

“HDFC MF seeks to combine Sovereign Green Bonds with an innovative debt product – an innovative mode of funding – target maturity fund (TMF). The launch of these schemes will expand the suite HDFC Mutual Fund index solutions, and allows a wider audience of investors to invest in Sovereign Green Bonds and contribute towards a greener planet,” according to the SEBI filing. The TMF is an open-ended passive investment scheme that aims to provide exposure to a predefined fixed income index. The structure is to be repeated.And it has a fixed maturity date.

sovereign green bonds

The Government of India will issue its first Sovereign Green Bond on January 25, 2023. The proceeds of SGrBs will be channeled into public sector projects that help reduce the carbon intensity of the economy.

The government released the Green Bond Framework in November 2022 to help investors understand the procedures and disclosures to be followed for issuing such bonds. The Ministry of Finance has constituted a ‘Green Finance Working Committee (GFWC)’ which will meet at least twice a year to support the Ministry of Finance with the selection of projects related to the Framework.

The proceeds will be deposited in the Consolidated Fund of India (CFI) as per regular treasury policy, and funds from the CFI will then be made available for eligible green projects.