Green Bonds

Green Bonds

Part of: GS Prelims and GS- III –  Economy

In news According to a Council On Energy, Environment and Water – Centre for Energy Finance (CEEW-CEF) report, Indian renewable energy project developers have raised Rs. 26,300 crore through issuance of green bonds during January to June this year. 

About Green Bond 

• A green bond is a debt instrument, like any other bond, by which investors can finance sustainable assets or projects. 
• The proceeds of the green bond offering are earmarked for use towards financing ‘green’ projects like electric vehicles, mass rapid transport systems, water and irrigation management, renewable energy etc.
• They can be raised either by financial institutions for further lending to green projects, or by the developers directly for investment in their projects.  

Benefits of Green Bonds

• Positive Impact on Environment
• Attracts Investment
• Alternative to Bank Loan: Green bonds are also an effective tool in driving down the cost of capital and reducing asset-liability mismatches.