India launches the second batch of sovereign green bond sales worth $600 million

India launched the second batch of sovereign green bond sales as a test of securities demand in a global environment with higher yields.

The Reserve Bank of India (RBI) issued five-year bonds worth Rs 50 billion ($600 million).

The first bond offering, last January, raised Rs 80 billion and received a so-called “grenium” valuation—any higher valuation due to its environmentally beneficial properties—of six basis points above the benchmark yield.

The yield on 10-year bonds rose by about 30 basis points from this year’s low in May, supported by stringent monetary policies by the Reserve Bank of India and central banks globally.

Policymakers will for the first time test what this means for India’s plans to finance its transition to green energy through market borrowing.

“Green, social, and sustainable bonds are ultimately bonds, and anything that happens to macromarkets will affect them,” said Xuan Sheng O Young, environmental, social, and governance analyst at BNP Paribas Asset Management.

“Investors’ demand for green bonds would increase faster than supply in Asia, possibly higher than traditional securities,” he added.