Indore Municipality To Lead With First Green Municipal Bonds For Solar Plant

The country’s first local government bond (Retail Municipal Bond) will be offered by a city in India with a solid environmental track record, and the revenues will be used to finance a solar power plant. Indore, which has been impossible to dislodge from the top rank among India’s cleanest cities for the past few years, is taking the initiative on the bonds now.

According to Divyank Singh, CEO of Indore Smart City, who is working with numerous stakeholders to finalise the offering, Indore Municipal Corp. hopes to generate up to Rs. 260 crores through a 10-year bond sale next month.

The Indore offering will be the first municipal green bond issued in the nation specifically for retail investors.

According to Singh, “The issuer has designated A.K. Capital Services Ltd. and SBI Capital Markets Ltd. as the offering’s lead managers. We could have easily obtained funding for the power plant from banks or other commercial sources, but we chose to engage the community instead since it fosters a sense of belonging. The issuance opens opportunities for others to follow suit and provides the municipality with an alternate, more recent source of financing.”

The World Bank has calculated that India’s urban areas will require $840 billion in urban infrastructure over the next 15 years to meet demand from a rapidly expanding urban population. the central bank has also been encouraging municipalities to issue bonds, to deepen the country’s debt market as well as bring in more accountability in local governance.

The 60-megawatt solar facility would be at a site near Indore for Rs 300 crores, according to Singh, who also added that it will enable the city to save up to Rs 2.5 crores per month on its electricity costs.

According to a poll done by the housing and urban affairs ministry of the nation, Indore has received the title of India’s cleanest city for six years running.

The Indore Municipal Corp (IMC) has already floated a 60 MW engineering, procurement, and construction (EPC) tender for the solar power project at Samraj and Ashukhedi villages in Madhya Pradesh.