HDFC Mutual Fund files for India’s first Sovereign Green Bond MF

HDFC Asset Management Co Ltd (AMC), investment manager to HDFC Mutual Fund (MF), has filed for India’s first Target Maturity Funds tracking Sovereign Green Bonds (SGrBs) – HDFC Nifty India Sovereign Green Bond Jan 2028 Index Fund & HDFC Nifty India Sovereign Green Bond (SGrBs) Jan 2033 Index Fund. 

SGrBs are bonds issued by the Government of India (GoI), whose proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy. 

“HDFC MF is seeking to combine an innovative method of financing – Sovereign Green Bonds, with an innovative debt product – Target Maturity Funds (TMFs). The launch of these schemes will expand the suite of HDFC Mutual Fund Index Solutions, and allow a wide audience of investors to invest in Sovereign Green Bonds and contribute towards a greener planet,” according to the SEBI filing. TMFs are an open-ended passive investment scheme that aims to replicate the composition of predefined fixed income index and has a fixed maturity date.

Sovereign Green Bonds

The Government of India issued its first Sovereign Green Bond on January 25, 2023. Proceeds of SGrBs will be deployed in public sector projects which help reduce the carbon intensity of the economy. 

The Government issued the Green Bond Framework in November 2022 to allow investors to understand the processes and disclosures that will be followed for the issuance of such bonds. The Ministry of Finance has constituted a ‘Green Finance Working Committee (GFWC)’, which will meet at least twice a year to support the Ministry of Finance with the selection of projects related to the Framework.

The proceeds will be deposited to the Consolidated Fund of India (CFI) in line with the regular treasury policy, and then funds from the CFI will be made available for eligible green projects.

Leave a Reply

Your email address will not be published. Required fields are marked *