India sells $1bn of sovereign green bonds

India has sold its first sovereign green bonds for $1bn as its government takes steps to raise funds for a net-zero transition through renewable energy.

The government sold 80 billion rupees ($1bn) of securities, which included 40 billion rupees each of ten-year and five-year debt, the Reserve Bank of India confirmed on 25 January.

The 10-year bond was priced at a coupon of 7.29%, which was 0.06 percentage points lower than comparable sovereign debt. The five-year bond was sold at a cut-off yield of 7.10%.

India has said it plans to put the proceeds raised from the bonds towards renewable energy, climate change adaption, water and waste management, pollution prevention and control and biodiversity.

This comes as India launched a sovereign green bond framework in late 2022, offering 160 billion rupees of investment split equally across two auctions. The sale of sovereign green bonds on 25 January was the first auction, with the second to follow on 9 February.