Central govt to issue Rs 20,000 crore 'Sovereign Green Bonds' in four tranches in FY25

NEW DELHI: The Finance Ministry on Friday said that the central government plans to accumulate Rs 20,000 crores by introducing the 'Sovereign Green Bonds' in the second half (Oct-Mar) of the financial year 2025.
The ministry in a press release informed the government’s plans to complete the borrowing for the second half of FY 25 through 21 weekly auctions.
As per the ministry, the green bonds will be issued in four tranches of Rs 5,000 crore each, with the first 10-year Sovereign Green Bond issued from November 25 to 29. The second issue, a 30-year bond of Rs 5,000 crore, will come between December 9 to 13, the third issue for a 10-year bond would be from January 27 to 31, and the final tranche will come between February 17 to 21 for a 30-year green bond.
Sovereign green bonds are a form of government debt designed to finance projects that support India's transition to a low-carbon economy. These bonds will be used to fund environmentally sustainable initiatives, including eco-friendly public sector projects.
Additionally, the government has retained the right to utilize the green shoe option, allowing it to accept additional subscriptions of up to Rs 2,000 crore for each security specified in the auction notifications. This flexibility will enable the government to meet increased demand from investors.
Central government’s weekly borrowing during the third quarter of FY25 through treasury bills is expected to be Rs 19,000 crore for 13 weeks.
Furthermore, the Reserve Bank of India (RBI), addressing temporary mismatches in government accounts and ensuring sufficient liquidity to meet short-term funding needs, has also set the Ways and Means Advances (WMA) limit for H2 FY25 at Rs 50,000 crore.
In the release, the Ministry of Finance said that the central government in consultation with the Reserve Bank of India, has finalized its borrowing programme for the second half of 2024-25, with the budgeted a gross market borrowing of Rs 14.01 lakh crore for FY25.
Out of this, Rs 6.61 lakh crore, or 47.2 per cent, is planned to be raised in the second half (Oct-Mar) of the fiscal year through the issuance of dated securities and bonds.