PCMC becomes first civic body in Maha to raise funds through green municipal bonds

Time of India

3 days ago

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Pune: The Pimpri Chinchwad Municipal Corporation (PCMC) has become the first civic body in Maharashtra to successfully raise funds through green municipal bonds.
The civic body has raised Rs200 crore in this manner, receiving an overwhelming response from investors, a senior PCMC official told TOI.
The bonds were floated via private placement on the BSE's Electronic Bidding Platform and attracted bids worth Rs513 crore — oversubscribing the offer by 5.13 times.
The base issue of Rs100 crore was fully subscribed within just one minute of opening, indicating strong investor confidence, said the official.
Now, the Rs200 crore will fund two major green infrastructure projects — the Harit Setu project in Nigdi Pradhikaran and the redevelopment of Telco Road from Gawali Matha to Indrayaninagar Chowk.
Both initiatives are aimed at advancing sustainable and climate-resilient urban development. They are also designed to promote non-motorised transport and improve last-mile connectivity for commuters.
PCMC municipal commissioner Shekhar Singh stated that work on the Harit Setu project commenced around six months ago, with a completion deadline of 30 months. The redevelopment of Telco Road is also expected to begin soon, allowing for the immediate diversion of the raised funds to accelerate project timelines.
"Harit Setu will be a first-of-its-kind project offering integrated first- and last-mile connectivity. It is set to be completed before the Bhakti Shakti Metro station in Nigdi becomes operational. Since it connects with the BRTS, it will ensure enhanced connectivity for commuters," Singh told TOI.
He also highlighted that the bonds were issued at a competitive interest rate of 7.85% for a five-year tenure — lower than the 7.97% rate recently offered to Chennai Municipal Corporation around two weeks ago.
Singh said this reflects PCMC's strong financial credibility. The civic body holds a 'AA+ Stable' rating from both CRISIL and CARE Ratings.
It may be noted that only a few municipal corporations in India — such as Vadodara, Ahmedabad, Ghaziabad, and Indore — previously raised funds through green bonds. PCMC's standing committee approved the green bond proposal in July 2023, and it received state govt's nod in Feb this year.
Singh said PCMC is taking steps towards sustainability and is ready to invest in green projects. The civic body will be spending money much in advance, ensuring there will be no issue about the utilisation of funds, unlike earlier reported at PMC for municipal bonds.
As an added incentive under Central govt's push for environmentally responsible financing, PCMC will also be eligible for an additional Rs20 crore grant.
Singh noted that the central govt offers up to 25% grant support for green projects, provided over 50% of funding is raised through mechanisms like green bonds. "The Harit Setu project meets these criteria. We will apply for the grant, and if sanctioned, the interest cost on the bonds will also be almost recovered," he said.
Earlier, in July 2023, PCMC raised Rs200 crore through regular municipal bonds, which are currently being used to finance the ongoing riverfront development project.
Pune: The Pimpri Chinchwad Municipal Corporation (PCMC) has become the first civic body in Maharashtra to successfully raise funds through green municipal bonds.
The civic body has raised Rs200 crore in this manner, receiving an overwhelming response from investors, a senior PCMC official told TOI.
The bonds were floated via private placement on the BSE's Electronic Bidding Platform and attracted bids worth Rs513 crore — oversubscribing the offer by 5.13 times.
The base issue of Rs100 crore was fully subscribed within just one minute of opening, indicating strong investor confidence, said the official.
Now, the Rs200 crore will fund two major green infrastructure projects — the Harit Setu project in Nigdi Pradhikaran and the redevelopment of Telco Road from Gawali Matha to Indrayaninagar Chowk. Both initiatives are aimed at advancing sustainable and climate-resilient urban development.
They are also designed to promote non-motorised transport and improve last-mile connectivity for commuters.
PCMC municipal commissioner Shekhar Singh stated that work on the Harit Setu project commenced around six months ago, with a completion deadline of 30 months. The redevelopment of Telco Road is also expected to begin soon, allowing for the immediate diversion of the raised funds to accelerate project timelines.
"Harit Setu will be a first-of-its-kind project offering integrated first- and last-mile connectivity. It is set to be completed before the Bhakti Shakti Metro station in Nigdi becomes operational. Since it connects with the BRTS, it will ensure enhanced connectivity for commuters," Singh told TOI.
He also highlighted that the bonds were issued at a competitive interest rate of 7.85% for a five-year tenure — lower than the 7.97% rate recently offered to Chennai Municipal Corporation around two weeks ago.
Singh said this reflects PCMC's strong financial credibility. The civic body holds a 'AA+ Stable' rating from both CRISIL and CARE Ratings.
It may be noted that only a few municipal corporations in India — such as Vadodara, Ahmedabad, Ghaziabad, and Indore — previously raised funds through green bonds. PCMC's standing committee approved the green bond proposal in July 2023, and it received state govt's nod in Feb this year.
Singh said PCMC is taking steps towards sustainability and is ready to invest in green projects. The civic body will be spending money much in advance, ensuring there will be no issue about the utilisation of funds, unlike earlier reported at PMC for municipal bonds.
As an added incentive under Central govt's push for environmentally responsible financing, PCMC will also be eligible for an additional Rs20 crore grant. Singh noted that the central govt offers up to 25% grant support for green projects, provided over 50% of funding is raised through mechanisms like green bonds. "The Harit Setu project meets these criteria. We will apply for the grant, and if sanctioned, the interest cost on the bonds will also be almost recovered," he said.
Earlier, in July 2023, PCMC raised Rs200 crore through regular municipal bonds, which are currently being used to finance the ongoing riverfront development project.