Vadodara Municipal Corp raises Rs 100 cr via 5-year green municipal bonds at 7.90% coupon: Officials

The corporation will deploy these funds in three water pumpimg drainage projects, which will help in disposal of sewage water effectively, officials said.

Vadodara Municipal Corporation on March 1 raised Rs 100 crore through green municipal bonds maturing in five years at a coupon rate of 7.90 percent, officials told Moneycontrol.

The bidding for the bonds took place on electronic bidding platform of BSE.

The corporation will deploy these funds in three projects viz., the 100 MLD STP Plant at SHERKHI, 21 MLD STP and Pumping station at UNDERA and Building New APS, Pressures Lines and Drainage Network at Bil Village which will help in disposal of sewage water effectively, officials said.

“These projects would ultimately contribute towards improvement in air and water quality as the sewage water would be collected, treated and discharged. Further, it would also be tertiary treated and the water would be reused for industry purpose and will help to save fresh water,” an official added.

On January 15, Moneycontrol reported citing sources that Vadodara Municipal Corporation will raise Rs 100 crore through municipal green bonds.

The municipal green bonds received 44 bids for Rs 1,460 crore, which is 14.60 times of the issue size. The issue was oversubscribed by 8 times within a second of opening of the issue, the official added.

The municipal bonds were rated ‘AA+/Stable’ and ‘AA/Stable’ by India Rating & Research and CRISIL Rating, respectively.

The corporation had been selected by Ministry of Housing & Urban Affairs (MOHUA), New Delhi and United State Treasury Department to receive free of cost Technical Assistance and Guidance from the Advisers of US Treasury Department, according to senior official of the corporation.

Advisers of US Treasury and MOHUA Officers provided full support and guidance during each stages of the bond issuance, the official said. Further, Vadodara Municipal Corporation has also been eligible for Incentive of Rs 10 crore to Rs 13 crore from Central Government as it has been successful in raising money through Green Municipal Bond.

SBI Capital Markets Ltd, acted as merchant banker to the issue, and MV KINI Law Firm as Legal Counsel. Tipsons Consultancy Services Pvt. Ltd acted as a co-arranger.