Chhattisgarh's Raipur Municipal Corporation plans to issue green bonds

The RMC is seeking to raise Rs 200 crore. The proposal is in the final stages. And, a detailed project report has been prepared to utilise the funds raised from the bonds, an official said

Raipur Municipal Corporation (RMC), the civic body in Chhattisgarh’s capital, is planning to launch green bonds in the current financial year to execute infrastructure projects.

Under the plan, the RMC is seeking to raise Rs 200 crore. The proposal is in the final stages. And, a detailed project report (DPR) has been prepared to utilise the funds raised from the bonds, a senior RMC official said.

“We have completed all the formalities and have obtained the required clearances,” the official said, adding that the proposal will be sent to the state government for final approval. Once it gets nod, the RMC will launch public issues of the green bonds.

Efforts are on to launch the bonds in the current financial year as the corporation has made a provision in the 2023-24 budget of the civic body. The bonds will be sold through post offices, banks, demat and net banking accounts. Besides, they will also be available in the office of the RMC.

A green bond is a debt security issued by an organisation for the purpose of financing or refinancing projects that contribute positively to the environment. A green bond is alternatively known as a climate bond.

The official, however, did not elaborate on which green projects it will invest in via the bonds. Another official said, initially, three mega commercial complexes were to be constructed.

The three are located in a prime location of the state capital.

The official added that the fund raised through the green bonds will be used for plying e-buses in Raipur and setting up a sewage treatment plant. The RMC is planning to keep the rate of interest at up to 9 per cent.

“It will help mop up maximum funds as the higher interest rate attracts the investors,” the official added.

Once the issue is open, the priority of officials will be to complete all the projects at the earliest. This will help minimise the interest burden, the official said.

Citing an example of a corporation in Madhya Pradesh, the official said it launched the green bond and raised money for a solar power plant. The project got delayed for over a year and the corporation is struggling to pay the interest.

The official said RMC will not commit the same mistake and complete all the projects at the earliest. This will ensure that interest is paid from the revenue generated from the complexes.