{"id":13261,"date":"2025-02-18T10:07:46","date_gmt":"2025-02-18T04:37:46","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=13261"},"modified":"2025-04-02T02:56:57","modified_gmt":"2025-04-01T21:26:57","slug":"sovereign-green-bonds","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/sovereign-green-bonds\/","title":{"rendered":"Sovereign Green Bonds (SGBs)"},"content":{"rendered":"<h2>Sovereign Green Bonds Latest News<\/h2>\n<p>Like several emerging markets, India also turned to sovereign green bonds to help fund its transition to a low-carbon economy, but investor demand remains weak.<\/p>\n<h2>About Sovereign Green Bonds\u00a0<\/h2>\n<ul>\n<li>SGBs are debt <strong>securities issued by a national government to fund projects<\/strong> that have positive<strong> environmental benefits.\u00a0<\/strong><\/li>\n<li>The <strong>proceeds <\/strong>from these bonds are <strong>exclusively allocated to green initiatives, <\/strong>which can include renewable energy projects, sustainable agriculture, waste management, and more.\u00a0<\/li>\n<li>Essentially, these bonds are a way for governments to <strong>raise capital while promoting environmental sustainability.<\/strong><\/li>\n<\/ul>\n<h2>Sovereign Green Bonds in India<\/h2>\n<ul>\n<li>The Union Budget 2022-23 announced the issue of SGrBs.<\/li>\n<li>The framework for the SGrBs was issued by the government on November 9, 2022.<\/li>\n<li><strong>What does the framework entail?<\/strong>\n<ul>\n<li>The government\u2019s framework is <strong>based on the International Capital Market Association\u2019s (ICMA) listed principles<\/strong> for issuing green bonds, which has four components:\n<ul>\n<li>Use of proceeds, project evaluation and selection, management of proceeds, and reporting.<\/li>\n<\/ul>\n<\/li>\n<li>The government said the bonds\u2019 proceeds will be used for green projects that:\n<ul>\n<li>Encourage energy efficiency<\/li>\n<li>Reduce carbon emissions and greenhouse gases<\/li>\n<li>Promote climate resilience and\/or adaptation<\/li>\n<li>Improve natural ecosystems and biodiversity, especially in accordance with the principles of sustainable development goals<\/li>\n<\/ul>\n<\/li>\n<li>The framework listed <strong>investments in solar, wind, biomass, and hydro energy <\/strong>projects, and <strong>urban mass transportation projects <\/strong>such as metro rail, green buildings, pollution prevention and control projects.\u00a0<\/li>\n<li>The government <strong>excluded projects such as fossil fuels, nuclear power generation, <\/strong>and <strong>direct waste incineration.<\/strong><\/li>\n<li>The eligible expenditure is limited to government spending that occurred not more than 12 months prior to issuance.<\/li>\n<li>The <strong>proceeds should be allocated to projects within 24 months <\/strong>of issuing the bonds.<\/li>\n<li>If an eligible green project is postponed or cancelled, it will be replaced by another eligible green project.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>How will Green Projects be Evaluated and Reported?<\/h2>\n<ul>\n<li>The Ministry of Finance has constituted a <strong>Green Finance Working Committee<\/strong> composed of relevant ministries and chaired by the chief economic adviser.<\/li>\n<li>The ministries will submit their projects to the committee, which will meet at least twice a year to evaluate the proposals.<\/li>\n<li>Once the projects are evaluated, the final list will be given to the budget division of the finance ministry.<\/li>\n<li>The division will then <strong>issue the bonds through the RBI<\/strong> and use the proceeds to finance the selected projects.<\/li>\n<li>The government will release an <strong>annual report on the selection of green projects,<\/strong> the funds deployed, and their impact on the greening of the economy.<\/li>\n<li>It will also maintain a <strong>Green Register <\/strong>with details of the green bond issuance, the proceeds generated, allocations made, and information about the eligible projects.<\/li>\n<\/ul>\n<h2>Sovereign Green Bonds FAQs<\/h2>\n<p><strong>Q1<\/strong>. What are green bonds issued by the RBI?<\/p>\n<p><strong>Ans<\/strong>. Green Bonds issued by the RBI are a type of sovereign bond aimed at raising funds for environmentally sustainable projects.\u00a0<\/p>\n<p><strong>Q2<\/strong>. What is the maturity period of sovereign green bonds?<\/p>\n<p><strong>Ans<\/strong>. The maturity period of sovereign green bonds typically ranges from 5 to 10 years, depending on the specific terms of the bond issuance.<\/p>\n<p><strong>Q3<\/strong>. What is a bond?<\/p>\n<p><strong>Ans<\/strong>. A bond is a debt security issued by an entity (such as a government, corporation, or municipality) to raise funds.<\/p>\n<p><strong>Source<\/strong>: <a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/sovereign-green-bonds-weak-india-9837469\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sovereign Green Bonds (SGBs) are debt securities issued by a national government to fund projects that have positive environmental benefits<\/p>\n","protected":false},"author":5,"featured_media":13262,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-13261","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/13261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=13261"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/13261\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/13262"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=13261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=13261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=13261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}