The government has decided to kickstart the issuance of Sovereign Green Bonds (SGrBs) on January 25 by issuing bonds of 5 and 10 years tenor for ₹4,000 crore each. This will be followed up by another tranche of SGrB issuance of 5 and 10 years tenor for ₹4,000 crore each on February 9.
The aforementioned SGrB issuances are part of the government’s half-yearly issuance calendar for marketable dated securities for the second half of the fiscal year 2022-23. Overall, the government will be raising ₹16,000 crore via SGrBs.
Uniform price auction
“The Reserve Bank of India, in consultation with the Government of India, has decided to notify the indicative calendar for issuance of SGrBs for the fiscal year 2022-23... SGrBs will be issued through uniform price auction,” the central bank said in a statement.
Under uniform price auctions, all successful bidders pay the same price — the cut-off price at which the market clears the issue. RBI said 5 per cent of the notified amount of the SGrB sale will be reserved for retail investors. These bonds will be designated as specified securities under the ‘Fully Accessible Route’ for investment in Government Securities by non-residents.
In the Union Budget for 2022-23, the Government had announced its intent of issuing SGrBs, as part of its overall market borrowings, for mobilising resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.
When the Reserve Bank of India (in consultation with the Government of India) notified the indicative calendar for issuance of Government dated securities for the second half of the fiscal year 2022-23 on September 29, 2022, it had said the government will issue SGrBs for an aggregate amount of ₹16,000 crore, in addition to raising ₹5,76,000 crore as per the calendar.