With the aim of promoting green economy across the world, green bonds have been initiated to finance the environment friendly businesses and assets. The first two banks to issue these were the World Bank and the European Investment Bank. They have attracted corporates and financial institutions across the world and became popular very quickly.
In recent times India has been emerging as a major player in the green bonds market. Among the developing countries, India is only the second country after China coming among the top 10 labeled green bonds players in terms of issuance.
Bonds basically are debt instruments which help issuer to get capital while the investors receive fixed income in the form of interest. In case of Green Bonds, the issuer gets capital from the investors only if investment (capital) is being raised to fund green projects relating to renewable energy or emission reductions etc.
- Green bond is a tax-exempt bond issued by federally qualified organizations or by municipalities for the development of brownfield sites.
- Brownfield sites are areas of land that are underutilized, have abandoned buildings or are underdeveloped, often containing low levels of industrial pollution.
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