Prelims level : Environment Mains level : GS-III Conservation, environmental pollution and degradation.
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Why in News?

  • NTPC is planning to increase solar energy generation in India by 10 GW by 2022, mainly funded by Green Bonds.


  • The Green Bonds are similar to Corporate Bonds. However, the proceeds of such Bonds are exclusively used for financing green projects such as renewable energy projects, projects to mitigate the impact of climate change, reducing the emission of fossil fuels etc.
  • With this instrument, the issuer of the green bond gets the capital to finance green projects while the investors receive fixed income in the form of interest.
  • The first Green Bond was issued in 2007 when European Investment Bank raised €600 million under the label “Climate Awareness Bond” dedicated for renewable energy projects and energy-efficient projects.
  • Though green bonds are only a small share of the larger bond market, they have grown rapidly over the last decade. In 2008, only $1 billion worth of green bonds were issued but by 2018 this has increased to $143 billion.
    • The green bond market is dominated by three countries – China, United States and France who have emerged as the largest issuers of Green Bonds

Green Bonds in India:

  • In 2016, SEBI published its official green bonds requirements for Indian issuers making the second country (after China) to provide national level guidelines.
  • The Indian Railway finance Corporation Limited (IRFC) has established a green Bond Framework for fund raising. The proceeds were proposed to be used for financing the Dedicated Freight Corridor Project and electrification of the railways. The IRFC had raised $500 million in 2017 from the 10 year green bond through India INX, GIFT City.
  • Further, in June 2019, Adani Green Energy issued Green Bonds Worth $ 500 Million.
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