Green Municipal Bonds | 30 Apr 2025

Why in News? 

Ghaziabad Municipal Corporation in Uttar Pradesh has become the first in India to issue a certified Green Municipal Bond under the Swachh Bharat Mission–Urban to promote sustainable water management. 

Key Points 

  • About Green Bond: 
    • Green bonds are debt instruments used to raise funds for green projects , particularly in areas such as renewable energy, clean transportation, sustainable water management , etc. 
      • A bond, which is a fixed income instrument, represents a loan made by an investor to a borrower (usually a corporate or governmental). 
      • Traditional bonds (other than green bonds) pay a fixed interest rate (coupon) to investors. 
    • Green bonds enhance the reputation of the issuer, as it helps demonstrate their commitment to sustainable development. 
  • Ghaziabad’s Success: 
    • Ghaziabad raised Rs 150 crore via India’s first Green Municipal Bond. 
    • The funds built a modern tertiary sewage treatment plant (TSTP). 
    • The project runs on a PPP-HAM model with 40% civic investment. 
    • The bond's success boosted investor trust in urban local bodies. 
    • Ghaziabad won the 2024–25 Best Municipal Treated Water Award. 

Swachh Bharat Mission-Urban 

  • Introduction: 
    • Swachh Bharat Mission-Urban (SBM-U) was launched on 2 October 2014 by the Ministry of Housing and Urban Affairs as a national campaign to promote cleanliness, hygiene and proper waste management in urban areas. 
    • Its objective is to make the cities and towns across India clean and free from open defecation . 
  • Swachh Bharat Mission-Urban 1.0: 
    • The first phase of SBM-U focused on achieving the goal of making urban India open defecation free by providing access to toilets and promoting behavior change. 
    • SBM-U 1.0 was successful in achieving its target and 100% of urban India was declared ODF . 
  • Swachh Bharat Mission-Urban 2.0 (2021-2026): 
    • SBM-U 2.0, announced in the Budget for 2021-22, is a continuation of the first phase of the same scheme. 
    • Its second phase aims to move towards the goals of ODF as well as ODF+ and ODF++ and focuses on making urban India garbage-free . 
    • It emphasizes on promoting sustainable sanitation practices, waste management and a circular economy.