The Mumbai Metropolitan Region Development Authority (MMRDA) has received approval to raise ₹50,000 crore through bonds to finance a series of critical infrastructure projects in Mumbai and its surrounding areas. This decision was made during an MMRDA meeting chaired by Chief Minister Eknath Shinde.
To secure the bond issue, MMRDA has agreed to provide land in Bandra-Kurla Complex (BKC), Wadala Truck Terminal, and other properties as collateral. These bonds, designed for long-term duration, will also benefit from the state government’s guarantee, providing additional security to potential investors. In 2017, MMRDA had previously explored raising funds for Metro projects through bonds issued by Life Insurance Corporation (LIC). However, the current funding strategy is more expansive, reflecting the authority’s significant financial needs due to escalating infrastructure expenditures. The cumulative cost of ten Metro projects, excluding the Metro 3 (Colaba-Bandra-Seepz) and Metro 1 (Versova-Andheri-Ghatkopar) lines, is estimated at ₹75,000 crore.
For the fiscal year 2024-25, MMRDA’s total receipts are projected at ₹39,453 crore, while expenditures are estimated to reach ₹46,921 crore. To bridge this gap, the state government has facilitated loan approvals up to ₹60,000 crore, with an additional loan of ₹30,000 crore also sanctioned. Of the approved loans, ₹30,593 crore has been allocated by the Rural Electrification Corporation (REC). The government has guaranteed an initial tranche of ₹12,000 crore, with a proposal for a second tranche of the same amount pending approval. Furthermore, a loan of ₹50,301 crore has been approved by the Power Finance Corporation (PFC).
To supplement these efforts, MMRDA has engaged SBI Capital Markets to assist in raising loans. Despite these measures, the authority requires a consistent influx of funds to execute its major projects. MMRDA plans to cover 15% of the project costs from its reserves, while the remaining 50% will be sourced through loans and bond issuance. Revenue generation will also be driven by land deals and the monetisation of MMRDA’s assets, particularly its Metro network. This strategy is crucial for sustaining the authority’s ambitious infrastructure agenda, which aims to transform the Mumbai Metropolitan Region through comprehensive development projects.
The approval to raise ₹50,000 crore via bonds represents a pivotal moment for MMRDA. This move not only addresses the immediate funding shortfall but also underscores the authority’s proactive approach to financial management and infrastructure development. By leveraging state guarantees and strategic asset monetisation, MMRDA aims to secure the necessary resources to deliver on its long-term urban planning and development goal.
