1. What are green bonds? 
A green bond is like any other regular bond but with one key difference: the money raised by the issuer are earmarked towards financing `green' projects, i.e. assets or business activities that are environment-friendly. Such projects could be in the areas of renewable energy , clean transportation and sustainable water management. 

2. What are its benefits? 
Green bonds enhances an issuer's reputation, as it helps in showcas sing their commitment to wards sustainable development. It also provides issuers access to specific set of global investors who invest only in green ventures. With an increasing focus of foreign investors towards green investments, it could also help in reducing the cost of capital. 

3. When did the concept start?
In 2007, green bonds were launched by few development banks such as the European Investment Bank and the World Bank. Subsequently, in 2013, corporates too started participating, which led to its overall growth. Back home, Yes Bank was the first bank to come out with a issue worth Rs 1,000 crore in 2015. Following this, few other banks too had green bond issuances. CLP India, was the first Indian company to tap this route. So far, Rs 7,200 crore has been raised via green bonds. 

4. Has Sebi mandated additional rules on such issues?
For designating an issue of a corporate bond as green bond, an issue apart from complying with the issue and listing of debt securities regulations, would have to disclose additional information in the offer document such as use of proceeds. 

5. What are the avenues where these funds can be invested?
Sebi's indicative list includes renewable and sustainable energy such as wind and solar, transportation, sustainable water management, climate change adaptation, energy efficiency , sustainable waste management and land use and biodiversity conservation. 

Expectations from 2017 and beyond

1. The interpretation indicated in SEBI’s green bond guidelines on what classifies as ‘green’, there is a need for developing a formal definition of ‘green’ to ensure understanding across sectors. 
A more descriptive and exhaustive classification from Indian regulators and policymakers in the coming years would be crucial in expanding the green bond market further.
2. Following global trends, the upcoming year is poised to witness the first ‘blue bond’ issuance (bonds used to specifically finance water infrastructure) in India.
 Globally blue bond issuances have crossed $10 billion, with India yet to enter the market. Given the rising financing gap in India’s water sector, it is imperative to utilise such innovative mechanisms for water infrastructure augmentation as well.
3. The recent drive by the Prime Minister to resuscitate the municipal bond market for water supply projects in cities such as Pune and Hyderabad is highly commendable. 
The Indian government’s ambitious push for smart cities has opened emerging points that may be suitable for private sector participation and may soon culminate into India’s first green muni bond.