Municipal bond is a type of debt instrument used by local governments to raise money. These are issued by civic bodies to get loans from investors for specific projects and generally have a tenor of 10 years. The issuing body pays annual interest at fixed rates to the investors. The Vadodara Municipal Corporation is to issue such bonds in January to fund its development works under AMRUT (Atal Mission for Rejuvenation and Urban Transformation). Ahmedabad became the first city in South Asia to use municipal bonds in 1998.