SGrB
RBI details auction of India's maiden Sovereign Green Bonds worth Rs 16,000 cr
Mumbai/IBNS: The Reserve Bank of India on Friday notified indicative dates for India's first-ever sales of Sovereign Green Bonds (SGrB) worth Rs 16,000 in two equal tranches on January 25 and February 9 of the current financial year.
The first auction of Sovereign Green Bonds –worth Rs 8,000 crore—will include 05 Year SGrB for Rs 4,000 crore and Rs 4,000 crore worth of 10-year sovereign green bonds.
The next tranche worth Rs 8,000 crore, to be auctioned on February 9, also comprises Rs 4,000 crore worth of 5-year sovereign green bonds and Rs 4,000 crore worth of 10-year sovereign green debt, the RBI said.
In a press communique, the ministry of finance said the issue of SGrBs is part of its overall market borrowings as announced in the Union Budget 2022-23.
The sovereign green bonds will be used for developing green infrastructure and in public sector projects which help in reducing the carbon intensity of the economy.
SGrBs will be issued through Uniform Price Auction, the ministry said, adding that they will be designated as specified securities under the ‘Fully Accessible Route’ for investment in Government Securities by non-residents.
The securities will be eligible for Repurchase Transactions (Repo) as per the terms and conditions mentioned in Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 as amended from time to time.
Five percent of the notified amount of sale will be reserved for retail investors as specified under the ‘Scheme for Non-competitive Bidding Facility in the Auctions of Government of India Dated Securities and Treasury Bills’.
Like regular government securities, sovereign green bonds would be eligible for ‘when issued’ trading in accordance with RBI guidelines, the central bank said. ‘When issued’ trading refers to a segment of transactions that enables market players to place bids at certain price levels before the actual auction of a bond is carried out.
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