In a first, NMC plans to issue Rs200 crore municipal bonds

Nagpur: For the first time in its history, Nagpur Municipal Corporation (NMC) proposes raising Rs200 crore through municipal or green bonds. The civic body also proposes to borrow another Rs400 crore from banks to finance major infrastructure and environmental projects in the city. The proposal was outlined in the civic body's Budget, which emphasises exploring alternative financing options to strengthen municipal finances and support large-scale projects.A major portion of the funds raised through bonds is expected to support the Rs1,900-crore Nag River Rejuvenation Project. Under the project framework, the civic body is required to contribute Rs304 crore. To meet part of this share, the NMC plans to mobilise up to Rs200 crore through the issuance of bonds.Municipal commissioner Vipin Itankar said the corporation is considering municipal or green bonds as a viable option for raising capital, especially if interest rates remain competitive. According to him, if the bonds attract interest rates between 6% and 8%, they could prove cheaper than bank loans, which typically carry interest rates of around 7.25% to 7.5%.The bonds may be issued either through a public offering, allowing citizens and institutional investors to participate, or through a private placement route involving financial institutions. However, a final decision on the mode of issuance is yet to be taken. Officials said the civic body will first complete the necessary registration and regulatory procedures with the Securities and Exchange Board of India (SEBI) before proceeding with the bond issue. The funds raised through the bonds could be utilised for projects related to river pollution abatement and other infrastructure initiatives aimed at improving urban services. In addition to the bond issue, the civic body also plans to raise a Rs400-crore loan under the Centre's AMRUT 2.0 scheme. The loan will be used for sewerage infrastructure projects, including the South Sewerage Zone and sewerage collection and treatment works in Hudkeshwar and Narsala areas.The funds will also support Pora River Pollution Abatement Project, which aims to strengthen wastewater management systems and reduce pollution in the river.Itankar clarified that the proposed Rs400 crore loan will be drawn in phases depending on project requirements, rather than being availed in a single tranche.Apart from these measures, the civic body also sought release of around Rs550 crore in pending funds from the state govt for various development works. Officials said the release of these funds would further boost the corporation's capacity to execute key infrastructure projects across the city.