Mumbai BMC Plans To Raise Up To ₹10,000 Crore Through Green Bonds Amid ₹2.34 Lakh Crore Liabilities

Mumbai: Facing liabilities of Rs 2.34 lakh crore amid large-scale infrastructure commitments, the BMC is looking to tap the debt market through green municipal bonds to diversify its funding sources. The civic body has floated an Expression of Interest (EoI) to appoint a debenture trustee for the proposed bond issue.

Bonds to fund water infrastructure

The BMC aims to mobilise between Rs 5,000 crore and Rs 10,000 crore to finance major water supply and wastewater management projects, a civic official said. The proposed projects include wastewater treatment plants at Dharavi, Versova, Bhandup, Ghatkopar, Bandra and Malad, a desalination plant, water tunnel projects and the proposed Gargai dam, expected to augment Mumbai’s water supply by 440 million litres per day (MLD).

Preparations for bond issuance underway

The civic body has already finalised an agency to assess its credit rating and selected the banks through which the bonds will be issued. The appointed agency will oversee the issuance process and investor-related arrangements, including liquidity support, for 15 years, according to details provided by the civic body.

A debenture trustee will independently represent and safeguard bondholders’ interests. The proposed issue could also help the BMC diversify its funding sources beyond internal revenues. In the Union Budget 2026-27, Finance Minister Nirmala Sitharaman announced an incentive of Rs 100 crore for a single municipal bond issuance of Rs 1,000 crore.

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Financial commitments drive funding search

Despite its substantial reserves, the BMC has limited funds readily available for infrastructure spending. Of its fixed deposits worth around Rs 77,905 crore, nearly 51% are earmarked against internal liabilities, including pension and gratuity payments, provident fund contributions and refundable contractor deposits. This leaves around Rs 39,731 crore available, against ongoing mega projects estimated to cost nearly four times as much, causing the BMC to explore additional funding avenues.

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