VIJAYAWADA: Appreciating the Andhra Pradesh Capital Region Development Authority (APCRDA) for issuing Amaravati Bonds, the Union Housing and Urban Affairs Ministry announced an incentive of Rs 26 crore under Atal Mission For Rejuvenation And Urban Transformation (AMRUT) scheme.
“Congratulations to APCRDA, Amaravati, for issuing bonds worth Rs 2,000 crore. In recognition, the Union Ministry awards them Rs 26 crore as an incentive under #AMRUT (sic),” the Union Ministry tweeted on Friday.
For the record, the Union Ministry, to encourage Urban Local Bodies (ULBs) covered under AMRUT scheme in raising finances through municipal bonds, has decided to provide incentives to 10 ULBs in 2018-19. The incentive would be limited to Rs 13 crore for every Rs 100 crore worth of bonds issued with a cap of Rs 200 crore.
The announcement came as a shot in the arm for the authority, which received a backlash from various quarters, especially Opposition parties claiming the authority raised funds at a high interest rate.
It may be noted that the APCRDA in August had issued bonds to institutional investors, who oversubscribed the Amaravati Bonds by 1.53 times. The coupon rate of the bonds was set at 10.32 per cent and the interest will be paid on a quarterly basis.
As there is a moratorium of five years, the authority will have to pay Rs 52 crore per quarter for the first five years of the 10-year-tenure. From the sixth year, the authority will repay 20 per cent of the principal annually. By the end of the tenth year, the APCRDA will have Rs 1,573.5 crore towards interest on the Rs 2,000 crore bonds.