Andhra govt approves ₹1,000 crore pooled municipal bond framework

The Andhra Pradesh government has approved over Rs 1,000-cr 'Pooled Municipal Bond Framework', marking an important step towards deepening market-based financing for urban infrastructure.

"Government of Andhra Pradesh has accorded in-principle approval to a Pooled Municipal Bond Issuance Framework, marking one of the state's most important steps towards deepening market-based financing for urban infrastructure and reducing the exclusive dependence of Urban Local Bodies on budgetary grants," a press release said on Saturday.

The framework envisages mobilising over Rs 1,010 crore through pooled municipal bonds for priority urban infrastructure projects with an indicative total cost of about Rs 1,123 crore in participating Urban Local Bodies, the release added.

 

The initiative is expected to open a new and sustainable financing channel for cities and towns to undertake essential infrastructure projects.

It is also aimed at strengthening financial discipline, transparency, creditworthiness and municipal governance, the press release added.

This initiative is aligned with the broader policy direction announced in the Union Budget 2026-27, which seeks to encourage higher-value municipal bond issuances.

The Union Budget announced an incentive of Rs 100 crore for a single municipal bond issuance exceeding Rs 1,000 crore, indicating the growing national importance of market-based financing for urban development.

As part of the southern state's broader urban financing roadmap, the Greater Visakhapatnam Municipal Corporation is also being positioned to explore green bonds, said the press release.

Visakhapatnam Municipal Corporation is aiming for green bonds considering the environmentally sustainable nature of several proposed and ongoing infrastructure investments in the city, the release added.