Vadodara: The Vadodara Municipal Corporation (VMC) is looking to become the first civic body in the country to issue “blue municipal bonds”. The civic body already holds the distinction of being the first municipal corporation in India to issue globally certified green municipal bonds.Blue municipal bonds are securities used to fund work that protects, restores or manages water resources in a sustainable way. VMC has used municipal bonds to fund its share in several Centre-backed schemes for infrastructure growth. The civic body has to contribute to projects taken up under the Jawaharlal Nehru National Urban Renewal Mission, Pradhan Mantri Awas Yojana, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Smart City Mission and Swachh Bharat Mission. The VMC issued municipal bonds in 2022 and raised Rs 100 crore, and issued globally certified green bonds in 2024 for another Rs 100 crore. These bonds were brought out at coupon rates of 7.15% and 7.9%. The issues were open only to institutional investors and were subscribed 10.07 and 14.6 times. One gain of issuing bonds is that the civic body gets a 10% incentive, with a cap of Rs 20 crore, on the amount raised through bonds. VMC was to pay Rs 2,150 crore as its share in various schemes and has already paid Rs 1,653 crore. It must pay the remaining Rs 497 crore in three or four years. The civic body is looking to raise Rs 200 crore through blue municipal bonds to meet its share of the cost of water supply projects taken up under AMRUT. VMC chief accountant Santosh Tiwari said that besides raising funds, the process of bringing out bonds helps build financial self-reliance, transparency, up-to-date bookkeeping and a credit rating for the organization. “The processes followed by us in the last two issues and their success caught the attention of various agencies, and we were also invited to share our experience and expertise on various forums,” he said. The VMC administration has asked its standing committee to empower the VMC commissioner to carry out the procedures needed for the bond issue. The bond issue will be open to qualified institutional buyers, high net worth individuals, retail investors and corporate houses.
