Creditworthiness Assessment - An Approach for Indian Cities

April 2024

Urban infrastructure requires large capital investments. In India, the past experience suggests the possibility of using municipal bonds to access the debt market for these investments. Raising capital through municipal bonds requires an assessment of creditworthiness of cities.

Assessing creditworthiness of a city is the first step towards accessing capital markets. In this context, this study of creditworthiness assessment for Indian cities was carried out by the Center for Water and Sanitation, CRDF. It is based on a framework for Creditworthiness Assessment developed by CWAS. The framework uses publicly available data. This framework was tested for 30 Indian cities. It provides an approach and methodology that can be used by cities in decision making as a pre-cursor to actual credit rating and market borrowing. It will also provide guidance to cities for measures needed to improve their creditworthiness for future borrowing.