What Is a Green Bond?
Power Finance Corporation Ltd (PFC), the leading NBFC in power sector, has successfully issued its first ever Euro Green Bonds.
- It is the first ever Euro denominated Green bond issuance from India.
- Moreover, it is the first ever Euro issuance by an Indian NBFC and the first Euro bond issuance from India since 2017.
What Is a Green Bond?
- A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects.
- These bonds are typically asset-linked and backed by the issuing entity’s balance sheet, so they usually carry the same credit rating as their issuers’ other debt obligations.
- Green bonds may come with tax incentives to enhance their attractiveness to investors.
- The World Bank is a major issuer of green bonds. It has issued 164 such bonds since 2008, worth a combined $14.4 billion. In 2020, the total issuance of green bonds was worth almost $270 billion, according to the Climate Bond Initiative.
- Green bonds work just like any other corporate or government bond.
- Borrowers issue these securities in order to secure financing for projects that will have a positive environmental impact, such as ecosystem restoration or reducing pollution.
- Investors who purchase these bonds can expect to make as the bond matures.
- In addition, there are often tax benefits for investing in green bonds.
