Q. Consider the following statements:
1.Sovereign Green Bonds are legally required to fund a country’s Nationally Determined Contributions (NDCs) commitments.
2.The Green Finance Working Committee (GFWC) is responsible for overseeing the selection of eligible projects for funding through India’s sovereign green bonds.
3.The Green Shoe Option in the Sovereign Green Bonds is used to accommodate additional investor demand beyond the initially planned issuance.
How many of the statements given above are correct?
Explanation –
Statement 1 is incorrect. Sovereign Green Bonds are often used to fund projects that align with a country’s environmental goals and can support efforts related to NDCs under the Paris Agreement. However, there is no legal requirement that mandates their use specifically for NDC commitments.
Statements 2 and 3 are correct. The Green Finance Working Committee (GFWC), established by the Ministry of Finance and chaired by the Chief Economic Advisor, oversees the issuance of sovereign green bonds in India. It is responsible for selecting eligible green projects and ensuring that funds are allocated appropriately. The Green Shoe Option allows issuers to accept additional subscriptions beyond the initially planned amount if there is high investor demand, providing flexibility in managing the issuance process.
Source: DD News
