Centre likely to move off green bonds

Over the past three years, the Centre, through RBI, has issued about ₹58,000 cr in sovereign green bonds

- Rhik Kundu & Subhash Narayan

The government may move away from green bonds to fall back on conventional government securities and other debt instruments for green financing in the coming years, as these so-called "climate" and "sustainable" bonds have delivered only modest returns, two people aware of the matter told Mint.

While many developed markets achieve a greenium—or green premium—of 3–8 basis points over conventional bonds in India, this has been limited to just 2 to 3bps at most, the first person mentioned above said.

One basis point is a hundredth of a percentage point.

Greenium is the difference between the yield or the return investors receive on a green bond and that from a similar conventional bond.