Continuing the trend of municipal corporations tapping the market to raise funds for infrastructure and green energy initiatives, the Agra Nagar Nigam is proposing a ₹500 million (~$5.8 million) municipal bond issue to part-finance a 7.5 MW solar project.

It has filed preliminary papers with the market regulator Securities Exchange Board of India, for private placement of up to 1,250 redeemable, non-convertible municipal bonds with a face value of ₹400,000 (~$4,634), with four separately redeemable principal parts of ₹100,000 (~$1,158) each.

The Agra municipal corporation intends to mitigate its rising electricity expenses with the captive use of power generated from the solar project, comprising ground-mounted and rooftop installations. The project will also help to meet the Solar City Mission targets.

The Solar City project for Agra envisages a rooftop solar potential of 2,787 MW across residential, commercial and industrial, and government sectors.

The solar project is estimated to cost ₹363.5 million (~$4.21 million). The municipal corporation plans to part-fund the project with internal resources of ₹73.5 million (~$851,604) and ₹290 million (~$3.36 million) from the net proceeds of the bond issue.

The rooftop installations will have a capacity of 750 kW each, while the ground-mounted projects will have a capacity of 2 MW and 4 MW. Excess power generated from the rooftop installations will be fed into the grid under a net-billing mechanism.

The annual expected power generated from the proposed rooftop projects is 2 million units, corresponding to a savings of ₹14 million (~$162,213) in energy costs.

Long-term open access and power purchase agreements will be signed with the Uttar Pradesh Power Corporation for captive use of the power generated from the solar project.

In recent years, urban civic bodies have been raising money using green bonds and other instruments. In February 2023, the Indore Municipal Corporation raised ₹3.03 billion (~$36.69 million) in green bonds, with its ₹2.44 billion (~$29.67 million) issue being oversubscribed by 1.24 times.

The Vadodara Municipal Corporation also raised ₹1 billion (~$11.58 million) for green initiatives, including rooftop solar projects, by issuing green bonds on a private placement basis.

Several civic bodies are implementing rooftop solar projects for use in their facilities. The Ministry of New and Renewable Energy has allocated ₹10 billion (~$119.5 million) to incentivize urban local bodies and panchayat raj institutions to promote and facilitate the adoption of residential rooftop solar systems under the PM Surya Ghar: Muft Bijli Yojana.