Kolkata: The transition to the green economy involves huge financing. Obviously it is not possible for the government to arrange for the gargantuan funds needed for the effort. At a decentralised level, urban local bodies are arranging finance for green initiatives. Green bonds are a key instrument to mop up capital for environment-friendly projects. On Tuesday, June 10, green bonds that raised Rs 200 crore for Pimpri Chinchwad Municipal Corporation in Maharashtra were listed on the BSE.
These bonds are the first such effort of an urban local body in Maharashtra. They are the fourth green bond in India after Indore, Surat and Ghaziabad Municipal Corporation. The listing event was attended by Maharashtra chief minister Devendra Fadnavis and deputy chief ministers Eknath Shinde and Ajit Pawar. According to reports, the Pimpri Chinchwad Municipal Corporation bonds not only successfully raised Rs 200 crore, but also evinced keen interest among investors since they attracted application worth 5.13 times the value. “The project for which we’ve raised this green bond is called Harid Setu. We finally ended up raising about Rs 200 crore for the entire project which we will deliver in the next two years,” said Municipal Commissioner of Pimpri Chinchwad Municipal Corporation, Sehkahr Singh. Harit Setu is a blueprint that focuses on creating a modern road network adhering to international standards, designed to meet the needs of pedestrians, cyclists, and public transport.
What are municipal green bonds
A green municipal bond is a debt instrument which is issued by local government bodies. The objective is to fund environmentally sustainable and climate-resilient infrastructure projects. Some of the projects that are typically funded by these instruments are in renewable energy, water treatment, and waste management. They are like normal municipal bonds with the added stipulation that these will fund only environment-friendly projects. They can also be viewed as a type of municipal bond where the funds are used for projects with a positive environmental impact such as renewable energy installations, improving water quality or enhancing waste management systems. The first certified green municipal bond in India was floated by Ghaziabad Nagar Nigam to finance a sewage treatment plant.
Structure of the Pimpri Chinchwad Municipal bond
These green bonds were rated AA+ by CRISIL and CARE. The instrument has an interest rate of 7.85%. The investors are assured of repayment through an escrow account that is backed by the urban body’s property tax collections.
The issue was private placement of up to 10,000 secured, rated, listed, taxable, secured, redeemable, non-convertible green bonds. They were in the form of debentures of face value of Rs 2 lakh each. An instrument has two separately transferable and redeemable principal parts. The issue opened June 3, 2025 and closed on the same day. “As soon as the bond was issued, the base amount of Rs 100 crore was subscribed within the very first minute,” said Maharashtra chief minister Devendra Fadnavis.
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These green bonds were rated AA+ by CRISIL and CARE. The instrument has an interest rate of 7.85%. This is the first listing of municipal bonds in India. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
