Question
Consider the following statements regarding Sovereign
Green Bonds (SGrBs): 1.     SGrBs are eligible for trading in the secondary market and can be used for Repurchase Transactions (Repo). 2.     Funds raised through SGrBs are deposited into the Consolidated Fund of India and managed by the Ministry of Finance’s Public Debt Management Cell. 3.     SGrBs can be used to finance projects related to nuclear power and large hydropower plants over 25 MW. Which of the above statements is/are correct? Read the following paragrph and answer question no 19 & 20. Sometime back in one of the Union Budget, the FM announced the government’s decision to issue SGrBs, a kind of government debt that specifically funds projects attempting to accelerate India's transition to a low-carbon economy. Funds raised through SGrBs are earmarked exclusively for green projects, ensuring transparency and accountability in fund utilization. SGrBs typically offer lower interest rates compared to Government-Securities (G-Secs), reflecting their alignment with sustainable development objectives. Issuance of SGrBs requires adherence to internationally recognised green standards and certification processes to ensure the credibility of funded projects.Solution
Statements 1 and 2 are correct. SGrBs are indeed eligible for secondary market trading and repurchase transactions (Repo), and the proceeds are deposited into the Consolidated Fund of India. However, statement 3 is incorrect because projects involving nuclear power and hydropower plants over 25 MW are excluded from funding through SGrBs, as these do not align with the green project criteria established for these bonds.
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