India’s inaugural blue bond issuances are imminent, with a maritime lender and a municipal body targeting the market before September’s end, signalling a new chapter in sustainable water-related financing.
India’s first blue bond sale is drawing close, with a state-run maritime lender and a municipal body both preparing to enter the new market before the end of September, according to Reuters and merchant bankers involved in the deals. Blue bonds are debt securities used to fund ocean- and water-related projects, a niche of sustainable finance that has already attracted more than $15 billion globally by mid-2025, the World Bank has said.
Sagarmala Finance Corp, a government-owned lender focused on maritime infrastructure, is expected to be the first to move. Managing director L.V.S. Sudhakar Babu told Reuters that the company is considering a sale of as much as 10 billion rupees and is tentatively aiming for the final week of September. Moneycontrol reported that the issue may include a greenshoe option of 5 billion rupees, with the company using the proceeds for longer-term borrowing.
The planned bond fits Sagarmala’s broader role in financing India’s ports and coastal supply chain. The lender backs projects ranging from last-mile port links and shipbuilding to inland waterways and coastal roads. According to Reuters and industry reports, the company recently received a non-banking financial company licence and is seeking to expand its loan book significantly over the next few years, while also trying to address a mismatch between its borrowing costs and the longer tenor of the loans it extends.
Vadodara Municipal Corporation, meanwhile, is awaiting approvals for a 2 billion rupee issue that could make it the first Indian civic body to sell a blue municipal bond. India Ratings has assigned the proposed bonds an AA+ rating, and the money is earmarked for water infrastructure, including a pump house, a treatment plant and a clear-water reservoir. Livemint said the issue is likely to be structured as a certified bond with an independent verifier, while The Times of India noted that Vadodara has already issued green municipal bonds and is one of the more experienced local borrowers in the market.
The two deals come as India’s municipal bond market slowly widens. Reuters reported that one large investor expects the market to double to about $1 billion by the end of the financial year, while Rajkiran Rai of the National Bank for Financing Infrastructure and Development said fresh issuance could reach at least 50 billion rupees through March. Over the past nine years, 22 cities across seven states have raised about 45 billion rupees in municipal bonds, including 17.5 billion rupees in the last financial year, he said.
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