Департамент ЖКХ и Кашмира запускает процесс выпуска муниципальных облигаций для финансирования городской инфраструктуры

J&K UT moves to tap municipal bond market under Urban Challenge Fund JMC, SMC eye market funding for high-return projects *Process initiated for Transaction Advisor, Legal Counsel Mohinder Verma JAMMU, Aug 24: Jammu and Kashmir has begun the groundwork for tapping the municipal bond market, with Jammu Municipal Corporation (JMC) and Srinagar... JMC, SMC eye market funding for high-return projects *Process initiated for Transaction Advisor, Legal Counsel Mohinder Verma JAMMU, Aug 24: Jammu and Kashmir has begun the groundwork for tapping the municipal bond market, with Jammu Municipal Corporation (JMC) and Srinagar Municipal Corporation (SMC) being prepared to access market financing for projects capable of generating substantial returns under the Centre's Urban Challenge Fund (UCF). The process for engagement of a Transaction Advisor and Legal Advisor has been initiated, marking a significant step towards enabling the two major urban local bodies of J&K to raise funds from the market rather than depending solely on conventional Government funding. Follow the Daily Excelsior channel on WhatsApp The Transaction Advisor and Legal Advisor will help both the Corporations for preparing transaction documents and conducting due diligence for the proposed bond issue, official sources told EXCELSIOR. The initiative assumes significance against the backdrop of the Urban Challenge Fund of the Government of India, under which municipal bonds are being encouraged as one of the market-based mechanisms through which urban local bodies can finance projects. Under the emerging financing model, Corporations are expected to go to the market and obtain loans for projects having the potential to generate immense profits, thereby creating a stronger link between urban infrastructure investment and the financial capacity of municipal bodies, sources informed. "The proposed move would mark an important shift for JMC and SMC, as municipal bonds could provide them access to a larger pool of institutional and market finance for commercially viable urban projects", they added. The Urban Challenge Fund represents a major shift in the approach to financing urban infrastructure, moving away from a predominantly grant-based model towards market-linked and reform-driven development. The Rs one lakh crore central scheme seeks to reform urban infrastructure financing by encouraging cities to mobilise resources through market mechanisms, including municipal bonds, bank loans and public-private partnerships. Under the UCF framework, cities are required to raise at least 50 per cent of project costs through market mechanisms to unlock Central and State grants. This makes the ability of Municipal Corporations to access the debt market increasingly important. "The broader objective is to develop growth hubs, promote redevelopment, strengthen water sustainability and improve municipal finances while encouraging greater private investment. With cities accounting for around 60-70 per cent of India's GDP, the Fund seeks to address the infrastructure, climate and governance challenges accompanying rapid urbanisation and promote sustainable, inclusive and economically competitive urban development", sources said. The Legal Advisor to be appointed by JMC will have a comprehensive role in preparing the two Corporations for the proposed market borrowing. The scope includes drafting resolutions for borrowing and issuance of listed debentures, assistance in obtaining SCORES registration with SEBI, due diligence for preparation of the prospectus or offer document and drafting and finalisation of transaction-related agreements, including the debenture trustee agreement and bond trust deed. The counsel will also examine the authority and approvals required for the issue, advise on pre-issue compliances, assist with stamp-duty matters and coordinate with various intermediaries involved in the transaction. A detailed regulation-wise compliance checklist will also have to be prepared in consultation with the Merchant Banker. The move assumes added importance as very few Municipal Corporations in the country have so far floated municipal bonds, making the proposed entry of JMC and SMC into the market a significant financial reform for urban governance in J&K, officials of the Housing and Urban Development Department said. "The proposed financing model is aimed at making Municipal Corporations more financially self-reliant by linking borrowing capacity with viable projects and their ability to generate revenues. Instead of waiting entirely for budgetary allocations, Corporations would be able to leverage their future revenue-generating potential to finance infrastructure", they added. "For J&K, the initiative could therefore have implications extending beyond the immediate bond issue, potentially creating a new financing architecture for large urban infrastructure projects in Jammu and Srinagar", the officials further said.