Gujarat: Vadodara Municipal Corporation Makes History With Asia's First Certified Green Municipal Bonds

Gujarat: Vadodara Municipal Corporation Makes History With Asia's First Certified Green Municipal Bonds

This landmark initiative underscores Gujarat's commitment to sustainable urban development and environmental stewardship.

FPJ SURATUpdated: Friday, March 01, 2024, 10:00 PM IST
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The Vadodara Municipal Corporation has achieved a significant milestone by becoming the first municipal corporation in Asia to raise 1 billion rupees through certified green municipal bonds. This landmark initiative underscores Gujarat's commitment to sustainable urban development and environmental stewardship.

With a semi-annual coupon rate of 7.90 per cent, the municipal corporation invited bids from investors earlier in the day, setting a new standard in green finance. The proceeds from this historic bond issuance will be earmarked for the construction and enhancement of liquid wastewater management infrastructure throughout the city, addressing critical environmental challenges.

Sean Kidney, CEO of Climate Bonds Initiative, hailed the Vadodara Municipal Corporation's issuance as a watershed moment for sustainable municipal finance, not only in India but across Asia. He emphasized the significance of local governments leveraging green finance to accelerate investments in environmental infrastructure, aligning with urgent global climate objectives.

Dilip Rana (IAS), Municipal Commissioner of Vadodara Municipal Corporation, highlighted the unique nature of the green municipal bond, which is globally certified by Climate Bond Initiative. The bond has received a rating of AA+ STABLE by India Ratings and will fund essential projects including two Sewage Treatment Plants (STPs) with a capacity of 121 MLD each and one Advanced Pumping Station (APS) with drainage networks. These projects aim to significantly improve air and water quality by collecting, treating, and reusing sewage water for industrial purposes, thus conserving precious freshwater resources.

Neha Kumar, Head of South Asia Programme at Climate Bonds Initiative, lauded the Vadodara Municipal Corporation's initiative as a testament to innovation and leadership in sustainable finance within South Asia. She emphasized the pivotal role of municipal governments in driving environmental progress and climate resilience, highlighting the transformative potential of green finance in reshaping urban infrastructure for the better.

“The Vadodara Municipal Corporation's successful issuance of certified green municipal bonds marks a significant step forward in the realm of sustainable finance, setting a precedent for municipalities across Asia” said a senior VMC officer

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