The South Delhi Municipal Corporation has set the ball rolling for issuance of municipal bonds worth Rs 500 crore, seeking to fund two important projects, officials said today.
The Standing Committee of the SDMC cleared the proposal after which it now awaits nod from the House.
"Once the House gives its approval, it will be sent to the Centre for the final nod. The bonds total worth would be Rs 500 crore and minimum worth of a bond would be Rs 10 with an interest rate of 8.5 per cent. The maturity period would be 10 years," the SMDC panel's chairperson Shikha Rai told reporters.
Officials said the bonds are proposed to be floated to meet requirements for two important projects solar panel-related works and the construction of the proposed headquarters of the SDMC.
"Since these projects would give good return on investment, so people would be inclined to buy the bonds. Also, previously only few civic bodies have adopted such policies like the Brihanmumbai Municipal Corporation (BMC) and the New Delhi Municipal Council," a senior official said.
The SDMC has been able to pursue adoption of this policy ad we have the AA+ ranking from the ICRA limited, an agency for rating urban local bodies in the country approved by the Union government, he said.