Bhopal (Madhya Pradesh): The Bhopal Municipal Corporation (BMC) has initiated the process of securing a ₹450 crore loan from the International Finance Corporation (IFC), the lending arm of the World Bank, to fund its share of works under the AMRUT project.
On Monday, the BMC Commissioner and IFC officials signed a mandate letter, marking the first formal step towards arranging funds for key infrastructure projects, including water supply and sewage management. However, the loan will be finalised only after obtaining mandatory approval from the state government, officials said.
Funds to support essential infrastructure
Under the Central Government’s AMRUT (Atal Mission for Rejuvenation and Urban Transformation) scheme, multiple projects related to water supply and sewerage systems are planned across the city. While a portion of the funding comes from the Centre and the state, the municipal body is required to contribute its own share.
With limited financial resources and unsuccessful attempts to raise adequate funds through municipal bonds, the corporation has turned to external borrowing to ensure development works continue without disruption. Officials have already begun working with the IFC to finalise loan terms and procedures.
Concerns over rising financial burden
Despite the push for infrastructure development, concerns are being raised about the corporation’s already strained financial position. Finance experts warn that taking on additional debt without strengthening revenue streams could create long-term challenges.
The repayment of loan instalments, along with interest, may increase financial pressure on the civic body, potentially leading to higher taxes or user charges for residents in the future.
Official statement
Speaking with Free Press, BMC Commissioner Sanskriti Jain said that in addition to municipal bonds, the corporation is now moving ahead with a loan from the IFC. “The mandate letter has been signed, and the process is underway. If all goes as planned, the loan will be secured soon.”
