RBI sells first green bonds worth Rs8,000 crore

The Reserve Bank of India (RBI) has auctioned Rs.4,000 crore worth 5-year-Bond at coupon rate of 7.10 percent, 5 basis points below the 5-year sovereign yield.

The RBI auctioned another Rs4,000 crore in Ten-year bonds at coupon rate of 7.10 percent at coupon rate of 7.29 percent, which is 6 basis points below comparable government securities.

The green projects, such as solar, wind, and small hydro projects, as well as other public sector initiatives, are to be funded with the Fund raised through the sale of the green bonds.

On February 9, a similar-sized green bond auction is scheduled.

The 5-year 7.38 percent 2027 bond yield was at 7.15 percent, while the benchmark 7.26 percent 2032 bond yield was at 7.35 percent during the time of bidding, as per reports.

According to the government's November framework, investors in these bonds do not assume project-related risks.

Ahead of January 25 auction, the government had met foreign investors to gauge demand, and foreign investment restrictions on these securities were lifted, a report said.

Including sovereign green bonds, the Reserve Bank of India (RBI) on Monday established a fully accessible route (FAR) for investments by non-residents in government securities. Securities that do not have any restrictions on foreign investor holdings are included in the FAR.

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