Indore Municipal Corporation to issue green bonds to raise Rs 2.45 billion

Indore Municipal Corporation will be floating a green bond on February 10, 2023 to raise Rs 2.45 billion for a 60 MW ground mounted captive solar photovoltaic project in Khargone district in Madhya Pradesh. The bonds will have a base issue size of Rs 1.22 billion with a green shoe option of a similar amount. The tenor of the green municipal bonds will be for 3, 5, 7, and 9 years with a coupon rate of 8.25 per cent.

In the offer document filed with SEBI, the corporation stated that it had been selected by the Ministry of New and Renewable Energy under the Central Public Sector Undertaking Program Phase II to set up a solar power project of up to 100 MW capacity with viability gap funding support. The Indore municipality has identified 210.84 acres of land to set up the solar project.

In January 2023, the Reserve Bank of India announced that it will auction Rs 160 billion in sovereign green bonds in two tranches in the Indian government’s first-ever such debt sale to raise funds for clean-energy projects. The proceeds will be used to fund solar power projects, followed by wind and small hydro projects and other public sector projects which help in reducing the carbon intensity of the economy.