Centre 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 be issuing Sovereign Green Bonds (SGrBs), for mobilising resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy,” the minsitry said in a statement.

The government will auction 5-year and 10-year green bonds worth ₹4,000 crore each on 25 January and on 9 February, and this would be a uniform price auction.

“Accordingly, it was notified in the Half-yearly issuance calendar for marketable dated securities for the second half of the fiscal year 2022-23 on September 29, 2022 that SGrBs for an aggregate amount of ₹16,000 crore would be issued. Government of India has since issued the Sovereign Green Bond Framework on November 09, 2022,” it said.

The Centre in consultation with the Reserve Bank of India, has decided to notify the indicative calendar for issuance of SGrBs for the fiscal year 2022-23.

The features of the SGrB issuance will be as under:

i) Issuance Method: SGrBs will be issued through Uniform Price Auction.

ii) Non-competitive bidding facility: Five per cent of the notified amount of sale will be reserved for retail investors as specified under the ‘Scheme for Noncompetitive Bidding Facility in the auction of Government of India Dated Securities and Treasury Bills’.

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

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

v) Underwriting: The underwriting in the auction of SGrBs by the Primary Dealers will be as per 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 accordance with the guidelines on ‘Transactions in the When Issued market 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: SGrBs will 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.