The central government has planned to collect Rs 20,000 crores through the ‘Sovereign Green Bonds’ in the second half (Oct-Mar) of the financial year 2025, according to a release by the Finance Ministry.
The release noted that the government is planning to complete the borrowing for the second half of the FY 25 through 21 weekly auctions.
According to the ministry, the green bonds will be issued in four tranches of Rs 5,000 crore each. The first issue of the 10-year Sovereign Green Bond of Rs 5000 cr will come on 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 green bond, for a 10-year term, will be issued from January 27 to 31, and the final tranche will come between February 17 to 21 for a 30-year green bond.
The Sovereign green bonds are a type of government debt that funds projects to help India transition to a low-carbon economy. It will be used to finance environmentally sustainable projects, such as public sector projects that are environment friendly.
In addition, the government also retained the right to exercise the green shoe option, allowing it to accept an additional subscription of up to Rs 2,000 crore against each security mentioned in the auction notifications. This flexibility will enable the government to accommodate additional demand from investors.
The weekly borrowing of the central government through Treasury Bills during the third quarter (October-December) of FY25 is expected to be Rs 19,000 crore for 13 weeks.
Furthermore, to address temporary mismatches in government accounts, the Reserve Bank of India (RBI) has also set the Ways and Means Advances (WMA) limit for H2 FY25 at Rs 50,000 crore, ensuring sufficient liquidity to meet short-term funding needs.
The Ministry of Finance in a release stated that the central government in consultation with the Reserve Bank of India, has finalized its borrowing programme for the second half of 2024-25.
For the entire FY25, the government has budgeted a gross market borrowing of Rs 14.01 lakh crore. Out of this, Rs 6.61 lakh crore, which accounts for 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.