India auctioned Rs 20,000 crore of sovereign green bonds in FY24, marking a 25% increase from the previous year.
According to the latest CEEW Centre for Energy Finance (CEEW-CEF) Market Handbook, the bonds, with tenures of 5 years, 10 years, and 30 years, were oversubscribed, indicating strong investor demand.
The green bond auctions were aimed at raising capital for projects to mitigate climate change, promote renewable energy, and enhance environmental sustainability.
The demand for green bonds was driven by growing investor interest in environmentally responsible investments and India’s potential as a green finance market.
India’s success in auctioning green bonds aligns with its efforts to meet climate commitments under the Paris Agreement and achieve its renewable energy targets.
The auctions served as a catalyst for mobilizing private capital towards sustainable development goals, complementing government initiatives and public sector investments.
The bonds support India’s efforts to reduce carbon intensity and meet its commitments under the Nationally Determined Contributions.
The proceeds will be deployed in public sector projects, focusing on sectors like clean transportation, renewable energy, sustainable water management, and afforestation.
India’s green bond auctions have seen a significant increase in demand, reflecting growing investor interest in environmentally responsible investments.
The auctions are attracting institutional investors, financial institutions, and individual investors due to their dual objectives of financial returns and positive environmental impact.
It must be noted that the Reserve Bank of India has allowed foreign investors to invest in sovereign green bonds, promoting green financing initiatives and renewable energy projects to support India’s climate goals.
Meanwhile, India’s non-conventional energy sector saw a surge in foreign direct investment (FDI) in FY24, surpassing $2 billion for the second year in a row.