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India Is Counting on Debut Green Bond to Cut Financing Costs

  • Officials expect ESG investors to pay a significant premium
  • Yet uncertain market means lower borrowing costs in doubt

India is aiming to get much lower borrowing costs from its debut sovereign green bond in coming months.

Officials want a significant “greenium,” the premium investors pay for bonds that fund environmental projects, according to people familiar with the matter. The government has developed a framework to sell the debt in line with widely-used principles from the International Capital Market Association, and is also liaising with the World Bank over best practices, they said, declining to be named as the talks are private.