Q. With reference to Green Bonds, consider the following statement:
1.A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects.
2.The World Bank is a major issuer of green bonds.
3.The functioning of green bonds is completely different from corporate or government bond.
Which of the statements given above is/are correct?
Answer: C
Notes:
Statement 1 is correct: A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects.
Statement 2 is correct: The World Bank is a major issuer of green bonds. It has issued 164 such bonds since 2008, worth a combined $14.4 billion. In 2020, the total issuance of green bonds was worth almost $270 billion, according to the Climate Bond Initiative.
Statement 3 is incorrect: Green bonds work just like any other corporate or government bond.
- Borrowers issue these securities in order to secure financing for projects that will have a positive environmental impact, such as ecosystem restoration or reducing pollution.
- Investors who purchase these bonds can expect to make as the bond matures.
- In addition, there are often tax benefits for investing in green bonds.
Source: Business Standard
