Chennai Corporation to raise Rs 205 crore via green bond for Kodungaiyur bio-mining
The initiative, being undertaken alongside a similar effort at the Perungudi site, seeks to scientifically reclaim 252 acres of land buried under 66.52 lakh metric tonnes of legacy waste at Kodungaiyur
Kodungaiyur dumpyard
CHENNAI: The GCC has passed a resolution to raise Rs 205.64 crore through green municipal bonds to fund the bio-mining project at the Kodungaiyur dumpyard, in a move aimed at bolstering sustainable urban development.
The initiative, being undertaken alongside a similar effort at the Perungudi site, seeks to scientifically reclaim 252 acres of land buried under 66.52 lakh metric tonnes of legacy waste at Kodungaiyur. In total, the Corporation aims to recover over 477 acres from decades of accumulated waste under these two projects.
Implemented under the Swachh Bharat Mission 2.0 (SBM 2.0), the Kodungaiyur bio-mining project is estimated to cost Rs 640.83 crore. Of this, the Centre will contribute Rs 160.21 crore, the State government Rs 102.53 crore, and GCC Rs 378.09 crore. An additional Rs 7.55 crore has been earmarked for environmental and social safeguards, bringing GCC’s share to Rs 385.64 crore.
While Rs 180 crore of the Corporation’s contribution will be secured through assistance from German development bank KfW, the remaining Rs 205.64 crore will be mobilised through the proposed green bond, with funds drawn from user charges under Solid Waste Management, 15th Finance Commission grants, and GCC’s sources.
This marks GCC’s first green municipal bond, following the success of its maiden bond issue earlier this year, which was listed on the National Stock Exchange on May 22 and oversubscribed 4.21 times, raising Rs 421 crore at a 7.97% interest rate.
The green bond will adhere to international frameworks such as those laid out by the International Capital Market Association (ICMA) and the Climate Bonds Initiative (CBI). As part of AMRUT 2.0 reforms, GCC also stands to receive an incentive of up to Rs 20 crore based on bond performance.
To oversee the bond issuance, a dedicated Bond Issue Committee will be constituted under the Commissioner, tasked with project approvals, intermediary appointments, compliance, and documentation. Citing the examples of cities like Indore and Pimpri-Chinchwad, which saw green bond oversubscriptions of 5.91 and 5.13 times, respectively, the Corporation expressed optimism about attracting strong investor interest in Chennai's sustainable infrastructure projects.
The Kodungaiyur project has already been tendered in six packages, with contracts awarded in February 2024. The waste will be processed at a cost of Rs 963.29 per metric tonne.
