The Vadodara Municipal Corporation (VMC), in partnership with Deloitte, launched ‘The Green Book: On Climate Finance and Green Municipal Bonds’ in Thiruvananthapuram, Kerala, on the sidelines of a Security Exchange Board of India (SEBI) event, following the successful Bombay Stock Exchange (BSE) listing of Municipal Green bonds in March 2024.
Taking VMC’s success as a case study and benchmark for other civic bodies eyeing the stock exchange for generating funds, the Green Book shares the efforts undertaken by the VMC in launching Asia’s first and a pioneering green bond.
“The Green Book, compiled through a joint effort of VMC and Deloitte, is an attempt to document the success and achievement of the VMC along with details of the efforts that went into listing the Green bond that will inspire other urban local bodies to take similar steps… The process and rules of SEBI are also included in the book,” said VMC Chief Accountant Santosh Tiwari.
Tiwari has also been instrumental in the previous successful listing of a five-year Rs 100 crore bond at the BSE on March 23, 2022, for 14 projects under Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme and had received 36 bids on the BSE BOND platform for Rs 1,007 crore, which was 10 times the issue size.
The success of the listing had also enabled the VMC to become eligible for an incentive of Rs 13 crore from the Central government.
The BSE BOND platform is an electronic platform provided by the BSE for the private placement of debt securities. It facilitates online bidding for these securities, aiming to improve price discovery and transparency in the fundraising process.
The Green bond was VMC’s second market issue. On Monday, Vadodara Mayor Pinky Soni, Municipal Commissioner Arun Babu, Deputy Mayor Chirag Barot, Standing Committee Chairman Dr Sheetal Mistry and Chief Accountant Santosh Tiwari, remained present at the event where SEBI whole-time member Ashwini Bhatia as well as SEBI Executive Director Pramod Rao and Deloitte Executive Director Vivek Mittal released the book.
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Babu, who took over as the Municipal Commissioner of Vadodara earlier this year, said, “The bond is an innovative mechanism for green financing in the urban sector. Vadodara is playing a pioneering role in green financing.”
The Vadodara Municipal Corporation (VMC) in March 2024 had successfully raised Rs 100 crore from the Certified Green Municipal Bond for Sustainable Water Infrastructure, which opened for bidding on the Electronic Bidding Platform (EBP) of BSE. The VMC received 44 bids on the BSE BOND platform for Rs. 1,460 crore within a second of opening the bid. The VMC said that the funds received from the bonds would be deployed in three projects — a 100 Million Litres per Day (MLD) sewage treatment plant (STP) at Sherkhi, a 21 MLD STP and pumping station at Undera and building new auxiliary pumping station (APS), pressures lines and drainage network at Bil village, which will help in disposal of sewage water effectively.
Standing Committee Chairman Dr Sheetal Mistry said, “The VMC has set a regional precedent with the success of the Green bond, which is certified by the Climate Bond Initiative (CBI) as a first for India and Asia. The book will provide other urban local bodies to take inspiration and follow the path set by the VMC in raising funds for infrastructure projects without depending solely on Central government grants.”
Aimed at fostering sustainable urban development aligned with the Paris Agreement, these bonds are dedicated to enhancing liquid waste water management infrastructure across Vadodara, according to the VMC statement.