Pimpri Chinchwad Municipal Corporation (PCMC), the governing body of the city on Pune's northwestern fringe, plans to raise Rs 2 billion through Green Bonds to fund key infrastructure projects. Palladium, a global development consultancy, is advising PCMC on this initiative.
The funds will primarily support the development of sustainable mobility infrastructure under the Haritsetu Project and the Telco Road project, which spans from Gawali Matha to Indrayani Nagar Chowk. These projects will include walking pathways, cycling tracks, junction redesigning, and footpath retrofitting.
Anoop Phanse, Associate Director at Palladium India, highlighted the advantages of Green Bonds, stating that they come with a "greenium," or lower borrowing costs, due to investors' focus on ESG (Environmental, Social, and Governance) compliance. “Green Bonds attract investors willing to forgo a small percentage of income in favour of sustainability-focused initiatives,” Phanse explained.
PCMC’s foray into Green Bonds reflects a broader shift towards sustainable urban development. Palladium India has also assisted PCMC in becoming India’s 12th urban local body to issue a Municipal Bond, securing a Rs 26 million grant from the Ministry of Housing and Urban Affairs.
Urban local bodies, traditionally reliant on property taxes and government grants, face challenges in revenue generation. According to a report by the Comptroller and Auditor General of India, urban bodies realize only 56% of property tax demand and generate just 32% of revenue internally. Bonds, such as Municipal and Green Bonds, offer a vital alternative for financing projects sustainably while ensuring robust cash flow for urban development.
(ET)
