SOVEREIGN GREEN BONDS
- February 10, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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SOVEREIGN GREEN BONDS
TOPIC: Economy
Context- Despite govt’s climate focus, grants to key adaptation fund are sliding.
- The Union Budget 2022-23 emphasised sovereign green bonds and thematic funds for blended finance in areas including climate action.
Concepts-
Sovereign Green Bonds:
- Green bonds, issued through the Reserve Bank of India, will be part of the government’s overall borrowing programme and used for projects leading to a less carbon economy.
- The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.
- The announcement is in sync with India’s commitment to achieving net-zero carbon emissions by 2070.
Green Bonds:
- Green bonds are issued by companies, countries and multilateral organisations to exclusively fund projects that have positive environmental or climate benefits and provide investors with fixed income payments.
- The projects can include renewable energy, clean transportation and green buildings, among others.
- Proceeds from these bonds are earmarked for green projects. This is unlike standard bonds, the proceeds of which can be utilised for various purposes at the discretion of the issuer.