India plans Rs 24,000 cr sovereign green bond as economy goes low carbon

India will issue at least 240 billion rupees ($3.3 billion) in sovereign green bonds as the country marks a shift towards a low-carbon economy, according to officials with knowledge of the matter.

The debut sale may take place in the first half of the fiscal year that starts on April 1, and a decision to sell more green debt will depend on the response to the initial issuance, the people said, requesting not to be identified as the information is private, said.

A finance ministry spokesman was not immediately available for a comment.

The South Asian country’s maiden foray into the green bond space comes as it plans to fund renewable energy projects that will help meet its goal of net-zero emissions by 2070. 

The government is expecting lower yields on green bonds, as otherwise it sees little purpose in issuing them, the officials said. The yield on the 10-year sovereign bond closed at 6.85% on Monday.

The planned issuance comes amid a global boom in sustainable investments. India is the world’s third-biggest emitter of greenhouse gases and plans to more than quadruple its renewable power generation capacity by 2030.

Indian renewable energy companies raised debt worth 17.6 billion rupees in February, the most in nearly a year, data compiled by Bloomberg show.