SDMC will issue municipal bonds to raise funds in next three months

NEWDELHI: From November-end, people can invest money in South Delhi Municipal Corporation (SDMC)’S bonds and earn an annual interest of 8.5%.

The move comes nine months after the SDMC surpassed the New Delhi Municipal Council in credit-worthiness and financial health, as per the independent rating agency ICRA.

It was rated AA+ in comparison to NDMC’S A- rating.

During a standing committee meeting on Monday, the SDMC approved a proposal to raise money from the market through municipal bonds worth ₹500 crore, and utilise it for various infrastructure projects for a period of 10 years.

“We have already prepared a detailed report on the projects, which will be funded through the amount raised from the municipal bonds. There is a plan to use the funds for establishing solar energy projects and the construction of our new office near Pragati Maidan,” Shikha Rai, standing committee chairperson, SDMC, said, after approving the project.

“As soon as the project receives consent in the next house meeting, we will send it to the Union government for the final approval,” Rai said.

SDMC officials said that the agency requires an amount of ₹180 crore to set up solar power plants in various places.

“These projects include setting up rooftop solar panels of 7.5 megawatt capacity at the SDMC buildings, a 20 megawatt capacity plant on vacant municipal land, a 500 kilowatt plant over a covered nallah at Greater Kailash and a 750 kilowatt capacity plant over the covered part of a nullah at Subhash Nagar,”an SDMC official said.

The SDMC also requires ₹320 crore for the construction of its new headquarters near IP Estate, Ring Road.

The initiative has been taken on the Union urban development ministry’s directions.

Before raising money from the market, the civic agency obtained credit ratings from ICRA, an agency approved by the Union government to rate urban local bodies in the country.

Credit ratings are assigned based on assets and liabilities of urban local bodies, revenue streams, resources available for capital investments and other governance practices in the last two or three years.

Last year, the North and East Delhi Municipal Corporations had also received their credit ratings; but they were not rated well, and thus no decision was taken on issuing municipal bonds.