The first green bonds issued by the Indore Municipal Corporation (IMC) have raised approximately
Rs 7.2 billion. The bonds have been oversubscribed by 5.90 times. The municipal organisation
intended to collect roughly Rs 2.44 billion through the issuance of these bonds for the construction
and operation of a 60 megawatt solar power plant at the villages of Samraj and Ashukhedi in the
Khargone district of Madhya Pradesh. It is anticipated to be the biggest solar facility for Narmada
water pumping and providing.
Green bonds are debt securities that are issued by a governmental or private organisation to finance
or refinance environmental projects. The first green municipal bond in India was issued by
Ghaziabad Nagar Nigam (GNN), a civic organisation in Uttar Pradesh, for the construction of a
tertiary water treatment facility. According to IMC Commissioner, Pratibha Pal, “The solar power
project will be funded, but more importantly, this will pave the way for other such (green) projects
and explore creative financing strategies to support them.”
When Indore became the first city to sell municipal bonds on the National Stock Exchange’s (NSE)
debt securities platform in 2018, the civic body hoped expecting a 10 to 15 times oversubscription of
its bonds as opposed to the 1.26 times oversubscription that was observed. When there is more
demand for new stock than there are shares actually available, the situation is referred to as
oversubscription.
The green bond received bids of Rs 6.62 billion on the first day, and it was 5.42 times
oversubscribed. “There are several reasons for such an overwhelming response, including the urban
local bodies for the first time in India issuing green bonds and the type of project we are opting for.
Now, a solar power plant is going to help the corporation reduce its recurring expenditure. But most
important is the timing. The opening for the issue was just after the budget, and in it, municipal
bonds were given huge importance,” said Pratibha Pal.