The Andhra Pradesh Capital Region Development Authority (AP-CRDA) is preparing to tap the capital markets for raising a part of the Rs. 32,000 crore required for construction of Phase-I of Amaravati.
The idea is to mobilise Rs. 6,000 to Rs. 7,000 crore for which there are no existing commitments from prospective lenders by the end of 2017 while spending the resources already tied-up with the Government of India, HUDCO, the World Bank and a clutch of international sovereign funds.
The CRDA has been advised by financial experts to raise funds in a staggered manner rather than make a jumpstart, lest its plans should go haywire because of the market risks.
Accordingly, the process of obtaining credit-rating by reputed agencies and statutory clearances from the Securities and Exchange Board of India (SEBI) is just being set in motion, said CRDA Commissioner Ch. Sridhar.
Mr. Sridhar told The Hindu in addition to availing financial support from the Central and State governments and floating regular debt instruments, raising capital through green bonds was being seriously considered due to low interest rates. Real estate investment trusts (REITs) are among the options being explored.
Besides, about Rs. 5,000 crore was sought to be raised through public-private partnerships. Offer letters from the Andhra and Canara Banks for Rs. 5000 crore and Rs. 3000 crore respectively were under examination.
Appointment of a merchant banker to carry out this fund-raising exercise is around the corner.
Mr. Sridhar said the incorporation of a non-motorised transportation, a ‘fused grid’ model of development in which people could just walk to the office, commercial and residential spaces, and renewable energy utilisation plans in the master plans qualified the CRDA to garner funds through green bonds. These models will help the CRDA in reducing the carbon footprint.
