The Reserve Bank of India (RBI) last week for the first time issued sovereign green bonds — worth Rs 8,000 crore — on behalf of the Government of India. The initial announcement in this regard was made by Union Finance Minister Nirmala Sitharaman in her 2022 Budget speech. The government had later announced it would issue such bonds worth Rs 16,000 crore this year as part of the overall market borrowing programme. There are investors who are willing to accept comparatively low returns to support green initiatives. Some institutional investors are also mandated to invest part of their corpus in such instruments. Corporations engaged in green businesses, as a result, manage to raise funds at relatively low rates. Globally, governments have used green bonds in a limited way so far. According to the data presented in a 2022 International Monetary Fund (IMF) note, sovereign green bonds constituted only about 2 per cent of the total issuance between 2016 and 2022.