RBI To Auction Rs 40 Billion Green Bonds in Two Tranches in Jan and Feb 2023

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The Reserve Bank of India (RBI) will auction 160 billion rupees ($1.93 billion) worth of sovereign green bonds in two tranches, the central bank said on Friday, in the government’s first-ever such debt sale to raise funds to finance clean projects.


According to the central bank, the Reserve Bank of India will auction 10-year and 5-year green bonds worth 40 billion rupees on January 25 and February 9 in a uniform price auction.


According to the RBI, the proceeds will be used for solar power projects. Next, wind and small hydro projects will follow.


The Chief Economic Adviser V Anantha Nageswaran will lead a green finance working committee that will choose public sector projects to be green-financed from those submitted by government departments.


Environment specialists and representatives of the ministry for environment, forests, and climate change will guide the selection process, the government stated.

Each year, the committee will identify new projects and allocate the proceeds of the bond sales within 24 months from the date of issuance.

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Market participants expect foreign banks and investors to participate in the auction, but they don’t see any local investors showing much interest.

Green bonds investments can be eligible for the statutory liquidity ratio (SLR), which is the minimum amount of deposits required by commercial banks to invest in liquid assets such as government bonds.

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