Investing in a Greener

Future: The Power of

Green Bonds
Contents
• What are Green Bonds?
• Benefits of Green Bonds
• Risks of Green Bonds
• Types of Green Bonds
• Regulation of Green Bonds
• Conclusion
What are Green Bonds?
• Green bonds are a type of debt instrument that are used to
finance projects that have positive environmental and climate
benefits. They are designed to help fund projects that are
focused on sustainability.
• Green bonds are issued by governments, corporations, and other
entities to raise funds for projects that promote environmental
protection and sustainability. Investors who purchase green
bonds are able to support projects that have a positive impact on
the environment and can earn a return on their investment.
Benefits of Green Bonds
• Green bonds provide an opportunity for investors to support projects
that have a positive environmental impact. They also provide a
financial return for investors, as they are typically issued with a fixed
interest rate.
• As per the auction details provided by the Reserve Bank of India
(RBI), SGrB 2028 maturing in 2028 will have a coupon rate of 7.10,
while SGrB 2033 maturing in 2033 will carry a rate of 7.29 per cent.
Types of Green Bonds
• Standard Green Use of Proceeds Bond: a standard recourse-to-the-issuer debt obligation
aligned with the GBP. 
• Green Revenue Bond: a non-recourse-to-the-issuer debt obligation aligned with the GBP in
which the credit exposure in the bond is to the pledged cash flows of the revenue streams,
fees, taxes etc., and whose use of proceeds go to related or unrelated Green Project(s). 
• Green Project Bond: a project bond for a single or multiple Green Project(s) for which the
investor has direct exposure to the risk of the project(s) with or without potential recourse to
the issuer, and that is aligned with the GBP. 
• Green Securitised Bond: a bond collateralised by one or more specific Green Project(s),
including but not limited to covered bonds, ABS, MBS, and other structures; and aligned
with the GBP. The first source of repayment is generally the cash flows of the assets. 
Regulations of green bonds
• Green bonds are subject to regulation by SEBI. These regulations are
designed to ensure that green bonds are issued responsibly and that the
funds are used for projects that have a positive environmental impact.
• Regulations can also provide assurance to investors that the green
bonds they purchase are legitimate and that the projects they finance
are in line with their sustainability goals.
Risks associated with green bonds
• Green bonds can be risky investments, as they are subject to the same
risks as any other investment. Investors should be aware of the
potential risks, such as default risk, interest rate risk, and liquidity risk.
• These bonds are also prone to "greenwashing", where the proceeds
from these bonds are not used in environmentally conscious projects.
Conclusion
• Green bonds are a type of debt instrument that can help to finance
projects that promote sustainability and environmental protection. They
can provide a financial return to investors while also helping to reduce
the environmental impact of certain activities.
• Investors should understand the risks associated with investing in green
bonds and should be aware of the regulations that govern them. By
investing in green bonds, investors can support projects that have a
positive environmental impact and can earn a return on their investment.