Sovereign Green Bonds (SGrBs) are government-issued bonds where the proceeds are exclusively used to finance environmentally sustainable projects—such as renewable energy, clean transportation, or water management.
India’s first Sovereign Green Bond was issued in January 2023 by the Reserve Bank of India (RBI) on behalf of the Government of India.
✅ Key Features of Sovereign Green Bonds
| Feature | Description |
|---|---|
| Issuer | Government of India (via RBI) |
| Use of Funds | Green/environmental projects |
| Tenure | Typically 5–10 years |
| Minimum Investment | ₹10,000 (face value per unit) |
| Listing | On stock exchanges like NSE and BSE |
| Risk | Very low (sovereign guarantee) |
| Tax Treatment | Similar to regular government securities |
🔍 Why Invest in Sovereign Green Bonds?
- ✅ Eco-friendly Investment – Supports India’s climate and sustainability goals.
- ✅ Low Risk – Backed by the Government of India.
- ✅ Diversification – Adds a green instrument to your portfolio.
- ✅ Transparency – Funds are monitored under the Green Bond Framework.
🧭 How to Invest in Sovereign Green Bonds (Step-by-Step)
🔹 1. Check Upcoming Issue Dates
RBI notifies Sovereign Green Bond auctions via its website and press releases. These are usually scheduled ahead of time and may follow a yearly or semi-annual calendar.
You can also track them via:
- RBI’s Auction Calendar
- Stock exchanges (NSE/BSE)
- Reputed financial news portals
🔹 2. Have a Demat and Trading Account
You’ll need:
- A Demat account (with NSDL or CDSL)
- A Trading account (with any SEBI-registered broker like Zerodha, Upstox, ICICI Direct, Groww, etc.)
Note: RBI Retail Direct Portal also allows you to invest without a broker.
🔹 3. Choose Your Platform
Option A: Through RBI Retail Direct
- Visit https://rbiretaildirect.org.in
- Register and complete KYC
- Bid directly in primary auctions
- Ideal for retail investors not using stock brokers
Option B: Through Your Stock Broker
- Log into your broker’s platform
- Navigate to “Bonds” or “G-Secs”
- Place your bid for Sovereign Green Bonds
- Minimum bid is usually ₹10,000; in multiples of ₹10,000
🔹 4. Primary or Secondary Market
Primary Market: Participate in new issues at face value during RBI auctions.
Secondary Market: Buy already-issued Green Bonds on NSE/BSE via your broker. The price here may vary with demand and interest rate movements.
🔹 5. Monitor Your Investment
- Interest (coupon) is paid semi-annually
- On maturity, full principal is returned
- You can sell bonds before maturity in the secondary market if needed
💡 Tax Implications
- Interest income is fully taxable as per your income slab
- Capital gains, if sold before maturity, may be taxed (short-term or long-term depending on holding period)
📝 RBI’s Framework for Green Bonds
India follows a Green Bond Framework aligned with international standards, ensuring:
- Funds are used exclusively for green projects
- Annual reporting on project progress
- Independent reviews and audits
📌 Summary
| Step | Action |
|---|---|
| Open Accounts | Demat + Trading account or RBI Direct |
| Track Issue | RBI calendar or broker notifications |
| Invest | Through RBI or broker platform |
| Hold/Sell | Hold till maturity or sell on exchange |
| Earn | Receive regular interest + principal |
🟢 Should You Invest?
Yes, if you:
- Want low-risk, government-backed investments
- Wish to contribute to green and sustainable development
- Are looking for a stable, long-term income source