Rs 2.34 lakh crore liabilities: India’s richest civic body turns to bonds for cash

The Brihanmumbai Municipal Corporation (BMC) is burdened with liabilities of Rs 2.34 lakh crore due to extensive infrastructure projects, which surpass its annual budget for 2026-27 by two and a half times. To address this financial strain, the civic body has issued an expression of interest (EoI) to appoint a debenture trustee for overseeing its proposed green municipal bonds issue, aimed at raising funds.

Municipal bonds are debt securities issued by municipal corporations to fund crucial public infrastructure projects. This move follows a significant financial loss of Rs 3,544 crore in BMC's reserves this year. The BMC has also finalized an agency for evaluating their credit rating and has identified banks that will issue the bonds.

The agency will manage the issuance process, investors' money, and provide liquidity security for 15 years. BMC aims to generate between Rs 5000 and Rs 10,000 crore through green bonds, funding projects such as wastewater treatment facilities, desalination plants, water tunnel projects, and the Gargai dam project. The government offers a Rs 100 crore incentive for municipal bond issuances of Rs 1000 crore.