RBI to Issue ₹160 Billion Sovereign Green Bonds in Two Tranches

The bonds will be issued on January 25 and February 9, 2023


The Reserve Bank of India (RBI), in consultation with the government, has said it will issue the Sovereign Green Bonds (SGB) worth ₹160 billion (~$1.9 billion) in two tranches on January 25 and February 9.

The allocation of the bonds will be split between five and ten-year tranches, worth ₹40 billion ($485.56 million) each.

The proceeds of the bonds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.

In September last year, the RBI had on said that it would issue SGB for an aggregate amount of ₹160 billion (~$1.9 billion) in the financial year 2022-23. In November, the government issued the Sovereign Green Bond Framework.

SGB Features 

The government had announced its intention to issue SGB in the Union Budget 2022-23.

The bonds will be issued through Uniform Price Auction and a non-competitive bidding facility. Under this, 5% of the notified amount of sale will be reserved for retail investors.

The bonds will also be eligible for repurchase transactions (repo) and be reckoned as eligible investments for statutory liquidity ratio (SLR) purposes.

The underwriting in the bond auction by the primary dealers will be as per the “Revised Scheme of Underwriting Commitment and Liquidity Support”.

The primary dealers will have to meet fresh underwriting commitments instead of the earlier requirements of bidding commitment and voluntary underwriting.

The bonds will also be eligible for trading in the secondary market.

SGB will be designated as specified securities under the ‘Fully Accessible Route’ for investment in government securities by non-residents.

The dates are tentative and subject to change if circumstances so warrant.

Earlier, the government-appointed agency CICERO Shades of Green, while rating the framework for the bonds ‘Good’ on the governance score, expressed fears they could be used to indirectly support coal firms.

A few other countries like Switzerland, Poland, and France have also issued sovereign green bonds to help enable them to transition to green economies.