{"id":77952,"date":"2021-01-23T10:50:29","date_gmt":"2021-01-23T05:20:29","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=77952"},"modified":"2021-03-01T13:50:24","modified_gmt":"2021-03-01T08:20:24","slug":"green-bonds","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/green-bonds\/","title":{"rendered":"Green bonds\u00a0\u00a0"},"content":{"rendered":"<p><b><span data-contrast=\"auto\">Why in News?<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">According to the Reserve Bank of India(RBI), the cost of issuing green bonds in India has generally remained higher\u00a0<\/span><span data-contrast=\"auto\">compared to<\/span><span data-contrast=\"auto\">\u00a0other bonds<\/span><span data-contrast=\"auto\">. It is<\/span><span data-contrast=\"auto\">\u00a0largely due to asymmetric information.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><b><span data-contrast=\"auto\">About\u00a0<\/span><\/b><b><span data-contrast=\"auto\">Green Bonds:\u00a0<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"7\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">It is a\u00a0<\/span><span data-contrast=\"auto\">debt<\/span><span data-contrast=\"auto\">\u00a0instrument\u00a0<\/span><span data-contrast=\"auto\">just like any other normal bond,\u00a0<\/span><span data-contrast=\"auto\">issued by an issuer for raising funds.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"7\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">The <strong>only difference<\/strong> is that these instruments are <\/span><span data-contrast=\"auto\">designed specifically\u00a0<\/span><span data-contrast=\"auto\">for funds\u00a0<\/span><strong>to support specific\u00a0projects benefitting<\/strong><span data-contrast=\"auto\"><strong> the environment<\/strong>.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"7\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">Green bonds typically come with <strong>tax incentives<\/strong> to enhance their attractiveness to investors.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"7\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"auto\">The<strong> World Bank<\/strong> issued the first official green bond in 2009.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><b><span data-contrast=\"auto\">Green Bonds in India:<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"11\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Yes Bank was the first Indian Bank to issue Green Infrastructure Bonds (GIBs) in India in 2015.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"11\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">SEBI has allocated the following eight categories with the tag of green projects: <\/span>\n<ul>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"11\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">a) renewable energy b) clean transportation c) sustainable water management d) climate change e) energy efficiency f) sustainable waste management and g) land use and h) biodiversity conservation. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><b><span data-contrast=\"auto\">Issues with Green Bond in India:<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"3\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Green bonds constituted only 0.7% of all the bonds issued in India since 2018.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"3\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">As of March 2020, Bank lending to renewable energy constituted 7.9% of outstanding bank credit to the power sector.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"3\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">The average coupon rate for green bonds in India with maturities between 5 to 10 years ha<\/span><span data-contrast=\"auto\">s<\/span><span data-contrast=\"auto\">\u00a0generally remained higher than the corporate and government bonds with similar tenure.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><b><span data-contrast=\"auto\">Suggestions:<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"\u25cf\" data-font=\"\" data-listid=\"8\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Better information management system in India may help in reducing maturity mismatches, borrowing costs and lead to efficient resource allocation in Green Bonds.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><a href=\"https:\/\/indianexpress.com\/article\/world\/oil-spill-taints-kremlin-plan-to-sell-4-billion-of-green-bonds-6459838\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\"><strong>Article Source<\/strong><\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Why in News?\u00a0 According to the Reserve Bank of India(RBI), the cost of issuing green bonds in India has generally remained higher\u00a0compared to\u00a0other bonds. It is\u00a0largely due to asymmetric information.\u00a0 \u00a0About\u00a0Green Bonds:\u00a0\u00a0 It is a\u00a0debt\u00a0instrument\u00a0just like any other normal bond,\u00a0issued by an issuer for raising funds.\u00a0\u00a0 The only difference is that these instruments are designed&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/green-bonds\/\">Continue reading <span class=\"screen-reader-text\">Green bonds\u00a0\u00a0<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":78020,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,9],"tags":[1398],"class_list":["post-77952","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-factly-articles","category-economy","category-public","tag-eco_6","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2021\/01\/Green-bonds.jpg?fit=1280%2C720&ssl=1","views":{"total":0,"cached_at":"","cached_date":1704886720},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/77952","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=77952"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/77952\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/78020"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=77952"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=77952"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=77952"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}