NABARD plans to launch its inaugural green bond sale by March, aiming to secure funds amounting to Rs 5,000 crore for sustainable and eco-friendly initiatives – EQ
In Short : The National Bank for Agriculture and Rural Development (NABARD) plans to launch its first green bond sale by March, aiming to secure Rs 5,000 crore. This initiative underlines NABARD’s commitment to financing environmentally sustainable projects. The green bonds will likely fund initiatives related to renewable energy, climate-smart agriculture, and rural development, contributing significantly to India’s sustainable development goals and environmental conservation efforts.
In Detail : Mumbai : The National Bank for Agricultural and Rural Development (Nabard) is likely to sell its first set of green bonds worth around ₹5,000 crore by the end of FY24, with the apex rural financier aiming for overall debt sales of ₹55,000 crore for the financial year.
Senior officials at the development financier said that the green bonds would likely be of five-year maturity and that the overall bond sale pipeline lined up for the second half of the current financial year was around ₹30,000 crore.
Going ahead, Nabard is likely to increasingly focus on green bonds, or debt instruments where proceeds are used to fund projects such as renewable energy.
“I will request the market… in fact I was talking to government officials – we should incentivise participants to invest in such bonds because these bonds are the need of the hour. For the investors there should be some incentive, maybe in terms of tax,” Shaji KV, Chairman, Nabard, said on Friday, during the listing ceremony for the institution’s maiden social bond issuance at the BSE.
On Tuesday, Nabard carried out the maiden sale of social bonds in the country, raising funds worth ₹1,040.5 crore via five-year bonds at a coupon of 7.63%.
NABARD’s social bond issuance was arranged by ICICI Securities Primary Dealership, AK Capital Services and Trust Investment Advisors.
“We are thinking of improving our investor base (for green bonds) because there will be some investors who are particularly focused on instruments like this, so we were exploring whether the Indian market is mature enough to have such participants as well,” Shaji said.