Finance Minister Namgay Tshering

Govt considering Green Bonds to encourage investments from Bhutanese abroad

The Finance Minister Namgay Tshering said that the government is looking at designing special government backed securities called Green Bonds to encourage and attract foreign remittances and investment.

The minister said that currently when Bhutanese send money through the banking route the RMA does give them a 2 percent incentive in the exchange rate but there is nothing much beyond that.

He said the Bhutanese sending the money from abroad would also like some returns on their hard earned money and this would be made possible where they can buy government backed Green Bonds and benefit from the coupon rate on the bond.

Bonds are securities where government or companies float them to take loans from the market. Bonds come with a coupon rate or interest rate that allows you to earn interest every year. You can also sell your bonds to others. A government backed bond is considered very secure as it is backed by the sovereign guarantee of the government.

The minister said that the current money sent is usually sent for social obligations like helping out family or for annual rituals and that is not their fault given the lack of investment options.

The minister said that the money raised from the green bonds will go into commercial projects.

The projects that are currently being thought of are renewable energy projects like small hydro projects, wind and solar projects. Lyonpo said Bhutanese will have a chance to make a return on investment and also be a part of these projects.

The minister said that the problem for countries like Australia is that the bank deposit interest rates are very low and so Bhutanese can get a better return through these Green Bonds.

The Green Bonds will take some time and it is part of measures to strengthen Bhutan’s foreign currency reserves and also get in funds for investment.

The Finance Minister Namgay Tshering said that the government is looking at designing special government backed securities called Green Bonds to encourage and attract foreign remittances and investment.

The minister said that currently when Bhutanese send money through the banking route the RMA does give them a 2 percent incentive in the exchange rate but there is nothing much beyond that.

He said the Bhutanese sending the money from abroad would also like some returns on their hard earned money and this would be made possible where they can buy government backed Green Bonds and benefit from the coupon rate on the bond.

Bonds are securities where government or companies float them to take loans from the market. Bonds come with a coupon rate or interest rate that allows you to earn interest every year. You can also sell your bonds to others. A government backed bond is considered very secure as it is backed by the sovereign guarantee of the government.

The minister said that the current money sent is usually sent for social obligations like helping out family or for annual rituals and that is not their fault given the lack of investment options.

The minister said that the money raised from the green bonds will go into commercial projects.

The projects that are currently being thought of are renewable energy projects like small hydro projects, wind and solar projects. Lyonpo said Bhutanese will have a chance to make a return on investment and also be a part of these projects.

The minister said that the problem for countries like Australia is that the bank deposit interest rates are very low and so Bhutanese can get a better return through these Green Bonds.

The Green Bonds will take some time and it is part of measures to strengthen Bhutan’s foreign currency reserves and also get in funds for investment.

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