Sovereign green bonds trading at IFSC to commence in 2nd half of this fiscal: RBI Governor

Reserve Bank of India (RBI) Governor Shaktikanta Das announced on Saturday that the trading of sovereign green bonds could begin at the International Financial Services Centre (IFSC) in Gujarat during the second half of the current fiscal year.

"We are in discussions with the IFSC, and it will be operational very soon. I believe it will be possible in the second half of the current financial year," Das stated.

In April, the RBI declared its intention to establish a framework for enabling the trading of sovereign green bonds in GIFT City. The government has been raising funds through green bonds since 2022-23, accumulating a total of Rs 36,000 crore over the past two years.

During the current fiscal year, the government has raised Rs 1,697 crore out of the Rs 12,000 crore scheduled to be raised by the end of September through green bonds, as the bids received were not favorable.

Addressing concerns about the lukewarm investor response, Das mentioned, "As the government's debt manager, we are closely monitoring the situation. If necessary, we will engage with the government to address any issues."

Das also highlighted the significance of a climate taxonomy, which was announced in this year's budget, stating, "This will have a substantial long-term impact on mobilizing funds for the green sector, not only through green bonds but also for overall financing of the green sector."

Finance Minister Nirmala Sitharaman, in her 2024-25 Budget speech, emphasized the importance of developing a taxonomy for climate finance to enhance the availability of capital for climate adaptation and mitigation, supporting India's climate commitments and green transition.