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.