Green bonds

Green bonds are financial instruments that finance green projects and provide investors with regular or fixed income payments. They emerged in a context where a lot of financing is needed to address environmental challenges. Hence it is critical to connect environmental projects with capital markets and investors and channel capital towards sustainable development, and green bonds are a way to make that connection. 

Green bonds serve as a mechanism for mobilizing capital towards climate-friendly initiatives and promoting sustainable development. When a government, municipality, corporation, or financial institution issues a green bond, they commit to using the proceeds to finance or refinance eligible green projects. Investors purchase these bonds with the expectation of earning a return through periodic interest payments and the repayment of the bond’s principal at maturity.