India to soon issue sovereign green bonds worth $3.3 billion; what are they?

India will soon issue its maiden sovereign green bonds worth at least $3.3 billion to fund the shift to a carbon-neutral economy, according to a report by Bloomberg. Finance Minister Nirmala Sitharaman had in her Budget speech in February announced that India will issue sovereign green bonds to fund public infrastructure projects.

What are green bonds?  

Green bonds are government- or company-issued borrowings and securities to fund and finance debt. Green bonds are just like any other debt instrument. They are bought by investors by providing principal to receive interest upon maturity. Green bonds differ from conventional securities in the way that the issuer pledges to use the amount raised purely towards financing projects that have a net positive contribution to the environment.

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