**Summary:**
In response to Lok Sabha Unstarred Question No. 3187, the Ministry of Housing and Urban Affairs (MoHUA) outlines the role of Green Municipal Bonds in financing sustainable urban infrastructure under the Swachh Bharat Mission Urban (SBMU). The government incentivizes Urban Local Bodies (ULBs) to issue municipal bonds through the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and AMRUT 2.0, providing ₹13 crore per ₹100 crore of bonds issued (maximum incentive of ₹26 crore per ULB). An additional incentive of ₹10 crore per ₹100 crore bonds issued (capped at ₹20 crore) is available exclusively for green bonds.
To date, ₹5,359 crore has been raised through municipal bonds, including green bonds, by 18 ULBs: Agra, Ahmedabad, Amaravati, Bhopal, Chennai, Gandhinagar, Ghaziabad, Hyderabad, Indore, Lucknow, Rajkot, Prayagraj, Pune, Surat, Vadodara, Varanasi, Visakhapatnam, and Pimpri-Chinchwad. MoHUA has released a total of ₹377.33 crore in incentives, including incentives for Green Bonds issued by Ahmedabad, Ghaziabad, Indore, Pimpri-Chinchwad and Vadodara.
Specifically, the Ghaziabad Municipal Corporation (GMC) issued a Green Bond worth ₹150 crore, for which MoHUA released an incentive of ₹19.5 crore. This issuance highlights GMC's ability to meet regulatory standards, obtain credit ratings, and access capital markets.
The Ministry views Green Municipal Bonds as a scalable model for cities, enabling access to climate-aligned financing and promoting fiscal discipline through a structured and transparent issuance process that supports sustainable urban services.
Key Entities Referenced
Ministry of Housing and Urban Affairs: The Indian government ministry responsible for policies and programs related to housing and urban development.
Swachh Bharat Mission Urban: An urban sanitation and cleanliness mission by the Government of India.
Ghaziabad city of Uttar Pradesh: A city in the state of Uttar Pradesh, India, that issued the first certified Green Municipal Bond.
Atal Mission for Rejuvenation and Urban Transformation (AMRUT): A mission by the Ministry of Housing and Urban Affairs to improve urban infrastructure.
Green Municipal Bonds: Bonds issued by Urban Local Bodies (ULBs) to finance environmentally sustainable projects.
Urban Local Bodies (ULBs): Local governing bodies in urban areas, eligible for incentives related to municipal bond issuance.
Ahmedabad city of Gujarat: A city in the state of Gujarat that issued Green Bonds.
Ghaziabad Municipal Corporation (GMC): The municipal corporation of Ghaziabad, Uttar Pradesh, that issued a Green Bond worth ₹150 crore.
O.I.H.
GOVERNMENT OF INDIA
MINISTRY OF HOUSING AND URBAN AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 3187
TO BE ANSWERED ON AUGUST 07, 2025
GREEN MUNICIPAL BONDS UNDER SBM-U
NO. 3187. SMT. HEMA MALINI:
Will the Minister of HOUSING AND URBAN
AFFAIRS be pleased to state:
(a) whether the Green Municipal Bonds providing a sustainable model
for financing urban infrastructure has added a new chapter in
financial landscape of India under Swachh Bharat Mission -Urban
(SBM-U) and if so, the details thereof;
(b) whether the successful issuance of first certified Green Municipal
Bond of the country by Ghaziabad city of Uttar Pradesh is a
landmark step towards promoting sustainable infrastructure and
urban resilience and if so, the details thereof; and
(c) whether Green Municipal Bonds are likely to be a model for future
cities across the country to combine fiscal discipline with
environmental responsibility and if so, the details thereof?
ANSWER
THE MINISTER OF STATE IN THE
MINISTRY OF HOUSING AND URBAN AFFAIRS
(SHRI TOKHAN SAHU)
(a) The Ministry of Housing & Urban Affairs (MoHUA) has been
providing incentives under Atal Mission for Rejuvenation and Urban
Transformation (AMRUT) and AMRUT 2.0 to encourage Urban Local
Bodies (ULBs) for the issuance of municipal bonds at the rate of ₹13
crore per ₹100 crore of bonds issued, subject to a maximum incentive of
₹26 crore per ULB. A second-time incentive is also available to ULBs
exclusively for the issuance of green bonds, with an incentive of ₹10
crore per ₹100 crore bonds issued, capped at ₹20 crore. So far, ₹5,359
crore has been raised through municipal bonds/ green bonds to finance
urban infrastructure by 18 ULBs namely Agra, Ahmedabad, Amaravati,
Bhopal, Chennai, Gandhinagar, Ghaziabad, Hyderabad, Indore, Lucknow,
Rajkot, Prayagraj, Pune, Surat, Vadodara, Varanasi, Visakhapatnam, and
Pimpri-Chinchwad. A total of ₹377.33 crore has been released as
incentive, including for Green Bonds issued by Ahmedabad, Ghaziabad,
Indore, Pimpri-Chinchwad and Vadodara.
…2/--2-
(b) Ghaziabad Municipal Corporation (GMC) has issued a Green Bond
worth ₹150 crore, for which MoHUA has released an incentive of ₹19.5
crore. The successful issuance of this bond demonstrates the
preparedness of GMC to meet regulatory requirements, secure credit
ratings and access capital markets.
(c) Green Municipal Bonds are emerging as a scalable model for cities
by facilitating access to climate-aligned financing while promoting fiscal
discipline. Their structured and transparent issuance process supports
sustainable urban services.
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