Indore civic body introduces bonds to raise funds for solar power plant

Indore is cleanest city in India through participation of the people and now infrastructure development will also take place with the help of the public, the mayor said.

Bhopal: Green bonds worth ₹244 crore issued by the Indore Municipal Corporation to build a solar power plant was unexpectedly oversubscribed to the tune of ₹661 crore on the first day of issuance, officials said on Saturday.

In the Union Budget 2023-24, finance minister Nirmala Sitharaman announced that the government will provide incentives to urban civic bodies to improve their finances and creditworthiness, and help them raise funds through municipal bonds. (REUTERS)

After approval from the capital markets regulator, the municipality issued municipal bonds of ₹1,000 each on Friday, according to mayor Pushyamitra Bharagava. The public issue closes on Tuesday.

The bond was issued to mobilise funds to set up a 60 MW solar power plant in Jalud village in neighbouring Khargone district that will be used to draw water from the Narmada river and supplying it to Indore, Bharagava said.

Indore is cleanest city in India through participation of the people and now infrastructure development will also take place with the help of the public, the mayor said.

In the Union Budget 2023-24, finance minister Nirmala Sitharaman announced that the government will provide incentives to urban civic bodies to improve their finances and creditworthiness, and help them raise funds through municipal bonds.

“The green bonds have been divided into four categories. Bonds up to ₹61 crore have been fixed for common citizens, ₹61 crore for corporates, ₹61 crore for organisations and ₹61 crore for high networth individuals,” said Divyank Singh, Indore’s Smart City chief executive officer. “Individuals can buy bonds from a minimum of ₹10,000 to ₹10 lakh. The face value of one green bond is ₹1,000, and it is divided into four parts of ₹250 each. The bond will be repaid in three, five, seven and nine years. Interest at the annual rate of 8.25% will be paid every six months on the deposit amount.”

“We received overwhelming response on the first day,” Singh said. “Three days are remaining on closure of subscription. As per rules, the bonds will be issued for ₹244 crore only. The oversubscribed money will be refunded.”