Green Bonds | UPSC 2021

What is Green Bond?

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.

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Benefits of Green Bond

• Attract Investment.
• Positive impact on Environment.
• Alternative to Bank Loan.

Why Important for UPSC?

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 from January to June this year.