The Government, in the Union Budget for 2022-23 announced that climate action would be a key priority and proposed that as a part of its overall market borrowings in 2022-23, Sovereign Green Bonds (SGBs) will be issued for mobilizing resources for green infrastructure. The proceeds will be deployed in public sector projects which will help in reducing the carbon intensity of the economy.
This is by no means a small step. Over time, the SGBs would provide a pricing reference for the private sector entities in India for their INR denominated borrowing for ESG linked debt. Thus, the issuance of SGBs would help in creating an ecosystem which fosters a greater flow of capital into green projects and entities undertaking such projects. 23.