This bond matters as it can fund renewable energy, sustainable construction, water conservation, and green urban projects. A bank press note states that it aligns with India’s net-zero goals and green infra capex push. The bank’s ESG alignment qualifies for green bond funds, FPIs, and domestic pension money.
BOB lists risks associated with the green bond
- Interest rate risk – 7-year tenor exposed to RBI rate cuts/cycles affecting price volatility.
- Greenwashing scrutiny – investors must verify actual green project deployment vs framework claims.
- Liquidity risk – large ₹10,000 Cr issue but secondary market trading may be thin initially.
- Prepayment risk – callable structure could affecting reinvestment yields.
- Regulatory changes – evolving green bond taxonomy/ESG norms may impact certification/refinancing.
