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Green Finance — Green Bonds: Steps to Apply
Green Bonds facilitate capital flows from responsible investors in developed countries into green projects in emerging economies. This page walks an issuer through the full application journey — who is eligible, how the market is governed, what a green bond actually requires, and what to prepare, in what order.
What a green bond is, and why an issuer would choose one.
A Green Bond is a fixed-income debt instrument where the proceeds raised are used exclusively to finance or refinance, in part or in full, new and/or existing eligible green projects. Unlike a general-purpose bond, its proceeds are earmarked, tracked, and reported on separately — which is what lets responsible investors channel capital into projects with a measurable environmental benefit, often at a lower cost of capital for the issuer.
The market standard that defines what counts as a "green" bond is the Green Bond Principles (GBP), a voluntary framework administered by the International Capital Market Association (ICMA). The rest of this page follows that framework end-to-end — from who can issue, through governance, defining characteristics, the application steps, paperwork, an indicative timeline, and who to reach out to along the way.
The GBP framework is issuer-agnostic — any of the following can issue a green bond, provided the underlying project qualifies (see below).
Sovereign & National Governments
National governments issuing Sovereign Green Bonds to fund public green infrastructure — in India, overseen by the Green Finance Working Committee and Public Debt Management Cell.
Corporates & Private Issuers
Companies raising capital — typically via an underwriter or investment bank — to finance eligible green projects on their balance sheet.
Financial Institutions & Banks
Banks and financial institutions issuing green bonds to on-lend the proceeds as green loans, or to refinance an existing green loan portfolio.
Municipal & Public Sector Entities
Municipalities and public bodies, including via green aggregators that bundle several smaller local projects into one exchange-tradable bond.
Project Developers & SPVs
Individual project developers or special-purpose vehicles, particularly where the project is too small for a standard public listing (see Alternative Routes under Application Process).
The project itself must also qualify
Regardless of who the issuer is, the underlying project must clearly fall under an eligible green category:
Renewable Energy
Solar, wind, hydro and other renewable generation projects.
Energy Efficiency & Green Buildings
Efficiency retrofits and certified green construction.
Clean Transportation
Electric vehicles, metro systems and other low-emission transport.
Waste, Water & Biodiversity
Waste management, water conservation, and biodiversity projects.
The International Capital Market Association (ICMA) acts as Secretariat to the Green Bond Principles (GBP) — a set of voluntary, principles-based rules rather than a mandatory regulatory regime. Governance operates at two levels: global market coordination, and issuer-specific / sovereign oversight.
Global market governance — ICMA and the Principles
The global standards for green bonds are managed through a collaborative, market-driven structure.
Executive Committee
The sole executive body of the Principles — 24 elected member organisations, split evenly across issuers, investors and underwriters. Reviews and updates the guidelines annually.
Secretariat (ICMA)
Provides administrative support and coordination for the GBP and the Principles generally.
Advisory Council
Complements the Executive Committee with input and market outreach, bringing in wider stakeholders including exchanges and rating agencies.
Working Groups
Focus on specific technical areas — for example, the Impact Reporting Working Group, which develops best-practice reporting metrics.
Sovereign & national governance — India's Sovereign Green Bonds
Individual countries run their own governing structures for national programmes. India's is a two-tier process.
Green Finance Working Committee (GFWC)
Chaired by the Chief Economic Adviser. Oversees and validates key decisions on green bond issuances, with representatives from the Ministry of Finance, the Ministry of Environment, Forests and Climate Change, and NITI Aayog.
Public Debt Management Cell (PDMC)
Situated within the Ministry of Finance. Responsible for managing, tracking and allocating the proceeds from sovereign green bond issuances.
Comptroller and Auditor General (CAG) of India
Acts as the independent auditing authority, verifying the allocation and utilisation of green bond funds.
What actually distinguishes a green bond from an ordinary bond — the four core components of the GBP, plus one structural point worth knowing upfront.
1. Use of Proceeds
Proceeds must be exclusively and formally earmarked for eligible green project categories, described in the legal documentation for the security.
2. Process for Project Evaluation & Selection
The issuer must clearly communicate its environmental sustainability objectives and the process for determining project eligibility.
3. Management of Proceeds
Net proceeds should be credited to a sub-account, moved to a sub-portfolio, or otherwise tracked in an appropriate, ring-fenced manner.
4. Reporting
Issuers must keep readily available, and update annually, information on the use of proceeds and the expected environmental impact.
Two more things worth knowing
External Review Is Standard Practice
While not always legally mandatory, a pre-issuance Second-Party Opinion (SPO) is strongly expected by the market to confirm the framework aligns with the GBP and avoids "greenwashing".
Usually Full Recourse to the Issuer
Most green bonds carry the same credit risk as the issuer's other debt — investors are relying on the issuer's overall creditworthiness, not just the underlying project's cash flows.
The lifecycle splits into two phases: preparing and structuring the bond before it goes to market, then allocating and reporting on proceeds after issuance.
A Issuing a Green Bond
Pre-issuance
B Launch the Bond into the Market
Post-issuance
Where to list it
To attract international and institutional investors, list the bond on a recognised sustainable exchange — for example the Luxembourg Green Exchange, LSE Sustainable Bond Market, Euronext ESG Bonds, Nasdaq Sustainable Debt Market, or SGX Sustainable Fixed Income.
If the project is too small for a public listing
Private Placement
Sell the bonds directly to a select group of institutional investors — pension funds, insurance companies — without a public exchange listing.
Sustainable Crowd-Investing
Use specialised green crowdfunding platforms to raise capital directly from retail investors.
Green Aggregators
Partner with development banks that bundle smaller local projects into one large, exchange-tradable green bond.
Six things to have in place before a green bond can be brought to market. Tap any item for detail.
Templates to fill in
Issuers wishing to be listed in the Database must complete and forward the relevant template to the Secretariat, and/or make their external review reports publicly available.
For issuers
For external reviewers
An indicative sequence and duration for a first-time issuer. Actual timing varies with issuer readiness, deal size, and market conditions — treat this as a planning guide, not a guarantee.
Framework development & internal approvals
~4–8 weeksDraft the green bond framework, confirm eligible project categories, and secure internal sign-off.
Second-Party Opinion (SPO)
~2–4 weeksEngage an SPO provider to review the framework. Can often run in parallel with the later stages of framework drafting.
Mandate an underwriter & structure the deal
~4–6 weeksAppoint an investment bank or underwriter, agree deal size and tenor, and prepare legal documentation.
Exchange listing preparation & regulatory filings
~2–4 weeksPrepare listing particulars and complete any regulatory filings required by the chosen exchange.
Marketing, book-building & pricing
~1–2 weeksInvestor roadshow, order book-building, and final pricing of the issue.
Issuance & settlement
~3–5 business daysThe bond is priced, allotted, and settled — proceeds move into the ring-fenced account.
Post-issuance allocation & impact reporting
Annually, ongoingPublish allocation reports until proceeds are fully deployed, and impact reports for the life of the bond.
For questions on the GBP framework itself, reach the ICMA Secretariat. For financing support, IFC is a common route.
IFC Headquarters — 2121 Pennsylvania Avenue, NW, Washington D.C. 20433, United States · +1 (202) 473-1000
Head of Corporate Communications
Washington D.C.
+1 (202) 473-0551
IFCmedia@ifc.org
Regional Director, South Asia
Principal Country Officer
Country Office
New Delhi, India
6th Floor, Worldmark-3, Aerocity, New Delhi, India 110037
(Serves: India)
Country Office
Mumbai, India
Godrej BKC, Unit-1, 3rd Floor, Plot C-68, G Block, Bandra Kurla Complex, Bandra East, Mumbai, India 400 051
(Serves: India)
Primary sources referenced on this page, plus related tools elsewhere in Green Finance.
Related tools in Green Finance