Ghaziabad lists India’s first green municipal bonds on BSE, what are green municipal bonds?

Ghaziabad becomes the first city in India to successfully issue ‘green municipal bonds’ on the Bombay Stock Exchange (BSE).

Created On: Apr 14, 2021 13:09 ISTModified On: Apr 14, 2021 13:09 IST
The listing ceremony of Ghaziabad Green Municipal Bond, Image courtesy: Twitter/ Ghaziabad Municipal Corporation

The Ghaziabad Municipal Corporation, a civic body in Uttar Pradesh, became India’s first municipal corporation to successfully list the country’s first green municipal bonds on the Bombay Stock Exchange (BSE) on April 08, 2021.

The corporation announced raising Rs 150 crore at 8.1 per cent. The proceedings will be used for setting up tertiary water treatment plants and supplying piped water via water meters in Ghaziabad.

The Union Government also gave a Rs 19.5 crore incentive for raising funds through municipal bonds. Mahender Singh Talwar, Municipal Commissioner, GMC during the listing ceremony of Ghaziabad Green Municipal Bond 2021 said that the bonds received Rs 401 crore subscription from at least 40 bids.

With the issuance of these municipal bonds, Ghaziabad also becomes the second city in Uttar Pradesh and the 10th city in India to raise municipal bonds.

Earlier, nine cities namely Ahmedabad, Amravati, Bhopal, Hyderabad, Indore, Lucknow, Pune, Surat, and Visakhapatnam have raised municipal bonds.

What are Green Municipal Bonds and their use?

Green Municipal Bonds are financial instruments for raising capital through the debt capital market. The issuer of these bonds raises capital from investors over a set time and repays the capital along with the interest when the bonds mature.

Unlike regular bonds, the issuer of green bonds is raising capital to fund ‘green’ projects and add to environmental benefit.

The potential projects eligible for issuance of green municipal bonds are in the category of:

• Biodiversity conservation

• Sustainable land use (afforestation, sustainable forestry, and agriculture, etc)

• Sustainable waste management

• Energy efficiency

• Climate change adaptation

• Sustainable water management (water recycling, clean, drinking water, etc)

• Clean transportation

• Renewable and sustainable energy

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