Centre to borrow INR7.5 lakh crore in H1FY25, eyes INR12,000 crore via green bonds

The MoF announced its intention to borrow INR 12,000 crore via sovereign green bonds (SGrBs) in the first half of FY25. This will be India’s sixth SGrB issuance, following issuances worth INR 16,000 crore and INR 20,0000 crore in FY23 and FY24, respectively. SGrBs can potentially instil investor confidence in green-debt instruments. Moreover, previous SGrB issuances witnessed a greenium. Although small, such pricing advantages may incentivise the government to make further issuances.

Will the recent inclusion of Indian Government securities in JP Morgan’s Government Bond Index-Emerging Markets (GBI-EM) draw the interest of international investors towards these bonds? Can this tranche further the Indian corporate green bond market?