Green Bonds: Meaning, Issuers, Benefits and Greenium

About green bonds

• A green bond is a debt instrument whose proceeds fund projects with a positive effect on climate and the environment.
• Introduced in 2007.
• Issuers: governments, companies, multilateral bodies, who must disclose expected climate impact.
• Greenium (green premium) means the saving that arises on coupon payments.

Projects covered

Solar, wind, biomass and hydro energy; urban mass transit; green buildings; pollution prevention and control.

Significance for India

• Public borrowing that speeds up a low-carbon economy.
• Targets supported: 175 GW renewable capacity by 2022 and net zero emissions by 2070.

Exam angle

• Coupon saving on green bonds: greenium.
• Introduced: 2007.