The National Bank for Agriculture and Rural Development (Nabard) has introduced a new financial instrument known as social bonds. These bonds are designed to fund specific social projects, marking a significant step in the bank's commitment to societal development.
The inaugural issuance of these social bonds is set at a substantial size of Rs.3,000 crore. This launch is noteworthy as it is the first time an AAA-rated entity has issued such bonds, setting a precedent in the financial market.
Nabard plans to list its first social bonds on September 29. The uniqueness of these bonds lies in their focus on financing projects that span various social sectors. These include providing affordable basic infrastructure, ensuring access to essential services like health, education, and vocational training, enhancing food security, and generating employment opportunities.
In addition to social bonds, Nabard has plans to issue sustainability and green bonds, diversifying its portfolio of financial instruments aimed at fostering sustainable development.
Projects eligible for financing through Nabard's social bonds must meet specific criteria. They should contribute to environmental mitigation, conservation of natural resources and biodiversity, and pollution control. Eligible projects may also include energy-efficient initiatives such as green buildings, energy storage, and smart grids.
Nabard is committed to bolstering the cooperative sector by providing funds to state cooperative bodies. This initiative ensures that financial resources reach district and primary cooperatives, facilitating initiatives like the Agri Infrastructure Fund and supporting the overall growth of the cooperative sector.
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