Aurangabad, Dec 10:
The Aurangabad Municipal Corporation (AMC) has geared up to obtain a loan of Rs 300 crore to deposit its share of Rs 250 crore in the Smart Cities Mission. Meanwhile, the civic administration thought of releasing Carbon Bonds as an alternative to raise the funds. However, it got disheartened on learning about the tedious process as it involves seeking permission from the Securities and Exchange Board of India (SEBI) as well as obtaining a guarantee from the State Government for the task, said the sources.
The cash-strapped AMC has no option to raise huge money through obtaining a loan. Hence, it sought proposals from different private banks. One bank agreed to release between Rs 150 crore and Rs 200 crore on low-interest rates. The AMC administrator A K Pandey expressed his thoughts of raising the money through selling Carbon Bonds.
According to a senior official from AMC's accounts section," It is mandatory to seek permission from SEBI prior to releasing of Carbon Bonds. The AMC will have to submit its financial status and if SEBI finds it satisfactory then only the permission would be granted. Besides, the state government will also have to submit a guarantee (on behalf of AMC) before releasing the bonds. A detailed plan which is being implemented to reduce the carbon footprints in the city by AMC will also have to be submitted." The process of seeking permission from SEBI is very complicated. Moreover, it would consume another six to eight months in accomplishing the task. Now, the AMC has only one alternative option before it. Henceforth, it would have to mortgage properties of AMC with the private bank and obtain a loan, he said.