Govt Green Bonds to get investments from LIC’s pensions funds
The government plans to issue at least Rs 16,000 crore to Rs 20,000 crore valued Govt Green Bonds in the second half of 2023-24 and is looking for a better cost than it got for the bond’s maiden issuance in late 2022-23.
The finance ministry envisions a better ‘greenium’, or green premium, for the following tranche of Govt Green Bonds as the Life Insurance Corporation of India (LIC) and other necessary domestic pension funds, have voiced interest in investing in the instruments if they are issued with more extended maturity terms, a person familiar of the matter has confirmed.
“LIC and some domestic pension funds have expressed more interest in picking up green bonds if offered papers of longer tenors, such as 30 years… They will be more interested because it is counted as infrastructure investment,” the source stated.
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“Among pension funds, EPFO (Employees’ Provident Fund Organisation) and PFRDA (Pension Fund Regulatory and Development Authority) have the corpus to invest,” the person continued.
The government initially issued Green Bonds in 2022-23. These bonds included five and ten years of maturity and were part of the central government’s full-year borrowing program. Nevertheless, the government could have been more impressed with the greenium it got in 2022-23.
