Which of the following statements is are correct regarding Green bonds 1 It is ...........

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Which of the following statements is/are correct regarding Green bonds?

1. It is a debt instrument through which the capital raised will be invested only in Green projects.

2. Green bonds carry higher interest rates and higher risk than other bonds.

3. The repayment of the capital depends on the success of the projects.

Select the correct answer using the code given below.

1 only

1, 2 and 3

2 and 3 only

1 and 2 only

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Explanation:

Indian Green Bonds are of shorter tenor compared to international issuers. Indian green bonds are of tenor ~ 10 years whereas a loan is generally 13 years. These are bonds for augmenting capital for environmental projects or projects declared as green projects. The money has to be paid back irrespective of success or failure. There is no provision as of whether they carry greater interest rate than other bonds. Hence, only statement 1 is correct and hence, answer is A.