Insurance regulator Irdai said insurers were encouraged to invest in sovereign green bonds, which would be considered “infrastructure investments”.

To de-concentrate and diversify insurers’ infrastructure portfolios, the Insurance Regulatory and Development Authority (IRDA) Irdai said in a circular that it is considering investing in sovereign green bonds.

“Investments in sovereign green bonds shall be considered infrastructure investments and classified as central government securities,” according to a circular issued on January 13.

The Government of India has proposed issuing Sovereign Green Bonds (SGrB) in the 2022-23 budget to reduce the carbon intensity of the economy and as a measure to meet its Nationally Determined Contributions (NDCs) under the Paris Climate Change Accord, 2015.

India plans to raise Rs 16,000 crore ($1.96 billion) this fiscal year through the issuance of sovereign green bonds. The RBI is scheduled to offer green bonds at auctions on January 25 and February 9.

It is worth noting that the Irdai had earlier discussed at length with its members the need to ensure the necessary diversification, avoid concentrating on specific categories of investments, promote infrastructure-related investments, and regularly monitor the investments of insurance companies.