India has set out to achieve net-zero emission by 2070, and for that it needs to invest $10 trillion, starting from this year itself. Bonds are a viable way for corporations as well as governments to raise money for financing business expansion as well as infrastructure projects, including bridges and powerplants. Green bonds are debt instruments which are aimed at raising cash specifically to fund projects and initiatives that bring down emissions.
On its path to become an emission-free economy, India has made its debut in the green bond market, with debt instruments worth $1 billion. The bonds set to be sold on Wednesday 25th January, will be followed by another tranche, as the Reserve Bank of India seeks to raise $1.93 billion from the debt instruments.
Investors can boost eco-friendly projects by purchasing green bonds and thrive from the sector’s growth, but won’t be getting any tax exemptions in India for now. For a successful debut issue of green bonds, the government has pitched them to foreign investors, along with public sector insurance firms and pension funds.
There are no limits for foreign players to buy green bonds, while insurers can use them as the infrastructure investments they are required to go through with. The bonds will come with five year and 10 year tenures, and a second tranche will be issued on February 9.
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