The Indore Municipal Corporation has 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 proceeds from the green bonds issue will be used to fund a 60 MW ground-mounted captive solar photovoltaic project in the Khargone district in Madhya Pradesh.

The green bonds received an enthusiastic response with the issue being oversubscribed in three hours after it opened.

The issue was oversubscribed by 1.76 times in the institutional investor category, while in the corporate investors category it was oversubscribed by two times. In the retail investor segment, the bonds were oversubscribed by 1.18 times.

The tenor of the green municipal bonds will be for 3, 5, 7, and 9 years with a coupon rate of 8.25%.

The Indore civic body has identified 210.84 acres of land to set up the solar project.

Last September, the municipal corporation had invited bids to appoint an engineering, procurement, and construction contractor for the ₹2.87 billion (~$34.75 million) project.

The municipal corporation said the project would enable it to reduce dependency on grid energy and reduce its carbon footprint. The project is also registered under Verified Carbon Standard Association, which manages the voluntary carbon markets program, to avail benefits of carbon credits.

Recently, the government completed the sale of ₹160 billion (~$1.94 billion) worth of sovereign green bonds, with the second tranche raising ₹80 billion ($968.76 million). Like in the first tranche, the second tranche comprised ₹40 billion ($485.56 million) worth of bonds with a five-year tenor and a like amount of bonds with a ten-year tenor.

The yield on the five-year bond closed at 7.25%, and the 10-year bond closed at 7.34%. The Reserve Bank of India (RBI) had set the cut-off yields at 7.23% and 7.29 % for the two bonds, respectively. The first tranche of India’s debut sovereign green bonds worth ₹80 billion ($968.76 million) were auctioned on January 25, 2023. The first installment yielded a slightly higher premium than the second one.