The National Bank for Agriculture and Rural Development (NABARD) is preparing to issue ₹10,000 crore worth of green infrastructure bonds, in what marks a significant leap forward in India’s climate-conscious financing landscape.
This strategic issuance is designed to support long-term investments in rural infrastructure while advancing NABARD’s overarching vision of environmental sustainability and climate resilience.According to NABARD Chairman KV Shaji, the bonds will have a maturity of over 10 years and will be a hybrid model, targeting both infrastructure development and green initiatives. The proposed green-cum-infrastructure bonds will help finance initiatives that directly align with NABARD’s 2030 green taxonomy and climate strategy, placing sustainability at the heart of India’s rural economy. “The aim is to drive inclusive growth throughenvironmentally conscious investments that serve both current needs and future generations,” he said at a recent industry event.
This fresh round of capital mobilisation follows NABARD’s well-received issuance of social impact bonds last year. Those rupee-denominated bonds raised ₹1,040.50 crore with a ‘AAA’ rating and a coupon rate of 7.63%. Building on that momentum, NABARD’s latest move underscores the growing appetite for ESG (Environmental, Social, and Governance)-aligned investments among institutional investors, both domestic and global.The proceeds from the green infrastructure bonds will fund projects designed to boost rural infrastructure while reducing ecological footprints—especially those improving water use efficiency, promoting organic farming, strengthening agri-logistics, and building climate-resilient rural livelihoods. The effort aligns seamlessly with India’s broader push to decarbonise key sectors while spurring rural development.
Alongside the bond issuance, NABARD is also rolling out the AgriSURE Fund, a pioneering ₹750 crore initiative aimed at nurturing the next wave of agri-tech innovation in India. Targeting early-stage startups, the fund intends to back 80 to 100 enterprises over the next five years. The average ticket size per startup is expected to range between ₹8 to ₹10 crore.The AgriSURE Fund’s primary focus will be on startups that are innovating in climate resilience, natural and organic farming methods, agri-input efficiencies, post-harvest technologies, and digital solutions for farmers. The selection process for startups will be rigorous and transparent, involving a dedicated investment committee, with inputs from agricultural universities, research institutes, and state-level agricultural departments.
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“India’s agricultural ecosystem is undergoing a digital and ecological transformation,” said Shaji. “With AgriSURE, we aim to empower grassroots entrepreneurs who are working on breakthrough ideas that could define the future of farming and food security.”NABARD also aims to implement a fund-of-funds model alongside direct equity investments, allowing it to partner with other venture capital players to scale up promising innovations. The bank will also focus on promoting impact funding, where success is measured not only by financial returns but also by the environmental and social outcomes achieved.Additionally, NABARD is piloting nearly a dozen projects focused on digitised agri-value chain financing, in partnership with commercial banks and co-operatives. These digital interventions aim to bring transparency and scalability to farm-level financing, reducing transaction costs while increasing credit access to small and marginal farmers.
As India faces increasing climate volatility, especially in agriculture-dependent regions, NABARD’s dual strategy of raising capital for green infrastructure and supporting climate-smart agribusinesses is expected to play a pivotal role in driving equitable and eco-friendly development. The initiatives will not only address rural vulnerabilities but also encourage job creation and rural entrepreneurship.
In the months ahead, NABARD’s success in these endeavours could serve as a blueprint for other financial institutions aiming to integrate climate resilience into mainstream development financing. With a proactive stance and forward-looking vision, NABARD is reinforcing its position as the financial backbone of India’s sustainable rural transformation.
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