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BLOOMBERG
India may sell as much as 250 billion rupees ($3 billion) of green bonds in the next fiscal year and plans to include longer maturity debt to the offering, according to people familiar with the matter.
There is a demand for papers of 30- to 40-year tenor, particularly from insurance companies, to fund projects with a longer gestation period, the people said, asking not to be identified as the government is yet to take a final call.
India offered green bonds in five-year and 10-year tenors, totalling 160 billion rupees, in the current year that ends on March 31. While the finance ministry has assumed green issuances at 1.6% of the overall borrowing of 15.43 trillion rupees next year, the officials said that the actual offering would depend on demand.
A finance ministry spokesperson did not immediately respond to an email and messages requesting for a comment. India is the world’s third-biggest carbon polluter and green bonds are part of its plan to fund the transition from dirty fossil fuels to clean energy.
It can help the government lower its borrowing costs, as seen in the last two auctions where the 10-year paper fetched a premium of about six basis points over the regular bond of same maturity.