Greenium and Sovereign Green Bonds

Recently, India’s sovereign green bond market is gaining momentum, with strong investor demand resulting in a persistent “greenium” over conventional government securities.

  • The average greenium in the first half of Financial Year 2026-27 was the highest since India began issuing sovereign green bonds in Financial Year 2022-23, indicating potential for greater green-bond issuance.

What is Greenium?

  • Greenium refers to the lower yield investors accept on green bonds compared to conventional government securities with similar characteristics.
    • Since bond prices and yields move inversely, a lower yield indicates a higher price, reflecting investors’ willingness to pay a premium for environmentally sustainable investments.

Significance

  • Lower ....
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