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Sujai Adithya
Business Development and Banking & Financial Services Expert
Asked a question 9 months ago

What is a Green Bond?

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Sujai Adithya
Business Development and Banking & Financial Services Expert

A green bond is a debt instrument issued by an entity like any other bond (with subtle differences) to raise funds from investors. Green bonds are focused to Environment, Social and Governance (ESG) projects. There is the double scope of environment benefit and development in green bonds. 

Green bond is issued to finance only green projects. Green bond issuer explicitly states that the fund raised will be used for environmental benefit activities like renewable energy, solar projects etc. Green bonds are being used based on market practices. Issuer can price Green bonds at a far better rate than the regular bonds due to the environmental benefit feature. 

Green bond is issued to finance only green projects. Green bond issuer explicitly states that the fund raised will be used for environmental benefit activities like renewable energy, solar projects etc. Green bonds are being used based on market practices. Issuer can price Green bonds at a far better rate than the regular bonds due to the environmental benefit feature.