When investors think of green finance, it is often in terms of preserving forests or restoring farmlands. But in India, it’s now finding a place on city streets – reshaping how we fund and design our urban futures.

In Maharashtra, India, Pimpri Chinchwad Municipal Corporation issued a first-of-its-kind green municipal bond to support Harit Setu, a sustainable transportation initiative. Valued at approximately US$24 million, the bond marks a new chapter in urban climate finance. It is the first time in India that a green municipal bond has been earmarked specifically for sustainable transport.

Harit Setu is the city’s flagship urban mobility project. Its vision is to link Pimpri Chinchwad’s 184 public parks and gardens into a network of non-motorised transport (NMT) corridors.

The project offers more than infrastructure: it proposes a shift from vehicle-centric development to people-first, nature-positive urban design. With global cities facing rising populations, deteriorating air quality, and unsustainable transport systems, green finance has emerged as a viable alternative – structured, accountable, and aligned with long-term goals.

“Green bonds provide cities with a structured, transparent, and accountable way to raise capital specifically for climate-aligned and environmentally sustainable projects,” says Anoop Phanse, Associate Director at Palladium India. “They serve as a bridge between public ambition and private investment.”

From Lockdown Insight to Urban Vision

The idea behind Harit Setu emerged during the COVID-19 pandemic. Lockdowns and mobility restrictions highlighted the lack of safe, accessible, and sustainable transport in dense urban areas.

“That period forced cities to think differently,” says Phanse. “We undertook extensive research into global examples, from walkable cities to 15-minute neighbourhoods to reimagine how Indian cities could respond.”

The outcome was Harit Setu, a plan to knit together Pimpri Chinchwad’s green assets into a contiguous NMT network. Palladium supported the Pimpri Chinchwad Municipal Corporation (PCMC) in launching the project through stakeholder consultations with transport planners, urban designers, civic groups, and local communities. A dedicated committee was formed to guide implementation, and a 4 sq. km pilot corridor featuring 21 km of redesigned streets aligned with India’s Urban Street Design Guidelines was launched.

The pilot served as an early proof of concept for walkability, cycling infrastructure, and community-centered urban design anchored in the principles of the 15-minute city, a concept in which all essential services are accessible within a 15-minute walk or bike ride from home. The ultimate goal is to create more sustainable, livable, and connected neighbourhoods.

Mobilising Capital, Structuring Confidence

Urban transformation requires more than vision, it demands funding. In 2023, Palladium helped PCMC raise US$24 million through a conventional municipal bond for riverfront development. Building on that momentum, the team proposed a green municipal bond to align with national sustainability goals and international green finance frameworks.

“We focused on strengthening institutional capacity, streamlining coordination with credit agencies, and aligning the bond issuance with national and international green finance frameworks,” says Phanse.

The bond was ultimately oversubscribed five times, drawing bids worth US$59.4 million. Offering a 7.85% annual interest rate with a five-year maturity backed by property tax revenues, the issuance attracted significant investor interest and demonstrated that cities could be credible, climate-aligned borrowers. And crucially, it offered proof to others that urban green finance is not just possible; it’s investible.

A Local Innovation with Global Echoes

Pimpri Chinchwad's green bond has caught international attention. The city was selected as one of ten global winners in the Bloomberg Initiative for Cycling Infrastructure Challenge, out of 175 applicants. It was the only city from India and the wider Asia region to be recognised, receiving a US$400,000 grant to scale its cycling infrastructure.

“Pimpri Chinchwad’s journey, from launching its first municipal bond to becoming the first Indian city to issue a Green Municipal Bond for sustainable transport, underscores how innovation in finance can go hand-in-hand with innovation in urban design,” says Amit Patjoshi, CEO, Palladium India.

“The Pimpri Chinchwad case demonstrates a broader truth: when public institutions innovate, community voices are integrated, and finance aligns with environmental goals, cities can advance faster toward climate resilience,” he adds.

The tipping point, when green finance simply becomes finance, may still lie ahead. But Pimpri Chinchwad has brought it closer.