Budget 2022: Green bonds will be issued to fund green infrastructure projects, says FM Sitharaman

Budget 2022: Finance Minister Nirmala Sitharaman announced 'green bonds' for 'green infrastructure' (Image credit: @ANI/Twitter)

Finance Minister Nirmala Sitharaman in her Budget Speech for Union Budget 2022-2023 mentioned the use of 'green bonds' that will be used for 'green infrastructure'. These bonds will be used for climate change and environmental focused projects. They will also boost the financing of clean energy projects.

The FM said that these green bonds will be issued to fund green infrastructure projects and the proceeds will be used for public sector projects. The aim is to lure investors to the domestic green bond market and eventually create a long-term financing avenue for private sector players.

Green bonds are an emerging, promising mechanism by which local governments can fund climate resilience and other environmentally focused projects.

Green bonds are not significantly different in structure than bonds used for other purposes but are used to finance environmentally beneficial activities.

Finance Minister Nirmala Sitharaman presented the Union Budget for the upcoming fiscal year of April 2022- March 2023 in Parliament on February 1. This is the fourth budget that Sitharaman is presenting and third budget being presented while India still reels under the impact of the COVID-19 pandemic.

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"This budget seeks to lay the foundation and a blueprint to steer the economy over 'Amrit Kaal' of the next 25 years from India at 75 to India at 100", said the FM while presenting the budget.