The Pimpri Chinchwad Municipal Corporation (PCMC) has successfully raised ₹200 crore through “Maharashtra’s first Green Municipal Bond.”
This pioneering issuance, which concluded on Tuesday, garnered an overwhelming response from investors, significantly oversubscribing the offer by 5.13 times. The initial base issue of ₹100 crore was fully subscribed within a mere minute of its opening on the BSE’s Electronic Bidding Platform via private placement, reflecting robust investor confidence in PCMC’s commitment to sustainable urban development and its robust financial management. This move sets a significant precedent for other urban local bodies in their pursuit of eco-friendly financing mechanisms.
The impressive investor uptake underscores a growing appetite in the financial markets for instruments that explicitly support environmental and climate-resilient initiatives. Offered at a competitive coupon rate of 7.85 per cent with a tenure of five years, the bonds received strong credit ratings of ‘AA+’ from both CRISIL Ratings and CARE Ratings, reinforcing their financial credibility. Officials confirmed that the structured repayment mechanism for these bonds is securely backed by an escrow of Property Tax collections, ensuring timely servicing of both interest and principal payments. This transparent and secure financing structure undoubtedly contributed to the bond’s oversubscription and investor confidence.
The substantial funds raised from this green bond issue are specifically earmarked for two major green infrastructure initiatives that align directly with PCMC’s commitment to sustainable and climate-resilient urban development. The first is the ‘Harit Setu Project’ in Nigdi Pradhikaran, which is anticipated to bring significant environmental benefits to the area. The second is the development of Telco Road from Gawali Matha to Indrayani Nagar Chowk, a project designed to enhance urban mobility while incorporating green principles. These projects are crucial steps towards building a zero net carbon future for the city, promoting eco-friendly infrastructure, and improving the quality of life for its residents.
Municipal Commissioner Shekhar Singh lauded the successful issuance, stating, “The overwhelming response to our Green Bond is a testament to the trust that investors place in Pimpri-Chinchwad’s vision for a sustainable future.” He further highlighted that this critical funding will “accelerate critical green infrastructure projects and strengthen our resilience against climate change.” This perspective underscores the broader societal benefits of such financial instruments, enabling cities to proactively address environmental challenges and build more sustainable, gender-neutral, and equitable urban spaces where all citizens can thrive.
This latest bond issuance marks PCMC’s second successful foray into the municipal bond market within two years, following a successful ₹200 crore issue in July 2023. The repeat success solidifies PCMC’s reputation as a financially astute urban local body capable of tapping into diverse capital markets for its development needs. Moreover, with the successful issuance of this green bond, PCMC also qualifies for a ₹20 crore incentive from the Government of India. This incentive, part of the central government’s support for environmentally responsible financing, further highlights the national recognition and encouragement for local bodies undertaking green initiatives. This financial incentive serves as a strong encouragement for other cities to follow PCMC’s lead, accelerating the adoption of green financing across India and paving the way for a more environmentally conscious urban landscape.
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