The Andhra Pradesh government has decided to raise approximately Rs 2,000 crore through an issue of infrastructure bonds. This is the first time any state has taken of issuing bonds.
The infrastructure bonds will be with the sovereign guarantee in two tranches of Rs 1,000 crore each. The first tranche will be raised by the end of this year and the securities will be listed on stock exchanges. Once the government completed allotment of developed plots in the proposed capital city region to farmers and landowners, the first tranche will be closed.
The proposal to raise Rs 1,000 crore through bonds is approved by the Capital Region Development Authority (CRDA). AK Capital Services is a newly appointed advisor for the proposed issue of infrastructure bonds.
The amount will be utilised in developing a new planned Amravati Capital City. The capital city is spread over 35,000 acres of land arranged by the state government through an innovative land pooling model. The estimated cost to build this city is Rs 31,000 crore which will be generated through several sources including the Centre, a loan about Rs 6,730 crore from world bank and Rs 7,500 crore from Hudco.
“We have now started looking at building the basic infrastructure for the capital city such as roads, water and sewerage pipelines, power, telecommunications infrastructure,” says Sridhar Cherukuri, Commissioner, CRDA.
Source: ET Realty