Nagpur: The Nagpur Municipal Corporation (NMC) has proposed to prepay the balance Rs14.77 crore loan taken for the AMRUT water supply project to improve its credit rating before raising Rs600 crore for two major river pollution abatement projects.The proposal will come up before the Standing Committee meeting chaired by chairperson Shivani Dani Wakhare on Friday.As per the agenda note, NMC borrowed Rs200 crore from Bank of Maharashtra in 2018. Of this, Rs128 crore was availed for cement concrete roads Phase II and Phase III, while Rs72 crore was earmarked for the AMRUT water supply scheme.The civic body has repaid the entire Rs128 crore loan for road projects, while only Rs14.77 crore remains outstanding under the AMRUT component. Officials have proposed a one-time settlement of the remaining loan instead of continuing with the scheduled repayment. The loan carries an interest rate of 8.85%, with 15 monthly instalments still pending. NMC is currently paying nearly Rs1 crore every month, including an estimated Rs12 lakh as interest.The civic administration believes closing the loan account ahead of schedule will reduce the interest burden by an estimated Rs1.13 crore while also strengthening NMC’s financial profile.The timing is significant as the civic body is preparing to mobilise substantial funds for upcoming infrastructure projects. NMC has already initiated the process of raising Rs200 crore through municipal bonds for the Nag River Pollution Abatement Project, while a proposal to secure a Rs400 crore loan from Bank of India for the Pohra River Pollution Abatement Project is under consideration. As per the proposal, obtaining a favourable credit rating is mandatory for both borrowings.If approved, the move will mark NMC’s first major debt restructuring initiative after the return of the elected civic body and reflects a shift towards improving financial indicators before tapping capital markets for large infrastructure investments.BOX# Why NMC wants early loan closureOutstanding loan: Rs14.77 croreInterest rate: 8.85%Instalments remaining: 15Current monthly repayment: Rs1 croreEstimated interest saving: Rs1.13 croreUpcoming fundraising: Rs200 crore municipal bonds + Rs400 crore bank loan for river pollution projects.
