SEBI Asks Civic Bodies to Finance Infrastructure Projects Through Bonds

Securities and Exchange Board of India (SEBI) has been conducting outreach programs to encourage civic bodies to consider raising funds for their infrastructural projects through bonds and pooled finance. The RBI and SEBI have been working towards augmenting the municipal bonds market for quite some time with SEBI approving a liquidity guarantee for corporate debt earlier this year and RBI in its note on municipal financing suggesting the mobilization of resources through municipal bonds.

Bonds and pooled finance serve as reliable means of raising capital and present investors with an appealing opportunity for long-term investments. The Municipal Corporation of Indore was able to raise Rs 661.52 crore through the issue of green bonds for setting up a Rs 244 crore solar power plant.

Through these capital raising options, SEBI aims to foster sustainable growth, better living conditions, enhanced public services while reducing reliance on conventional methods. The officials from SEBI also raised awareness about an information database that contains a comprehensive repository of data specifically focused on municipal bonds. The repository includes checklists for pre-listing requirements, templates for agreements among different stakeholders, and a potential due-diligence questionnaire for merchant bankers. SEBI has strongly urged civic bodies to identify viable projects and develop plans for sustainable development.