BEIJING, March 28 (Xinhua) -- Beijing will issue 2 billion yuan (298 million U.S. dollars) in local government bonds Friday, available over the counter at commercial banks for the first time to smaller investors.

Individual, small and medium-sized institutional investors can buy the bonds at 11 banks, including Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and Bank of China between April 1 and 3. The purchase threshold is 100 yuan, according to the municipal bureau of finance.

The funds raised will be used for land reserve and shantytown renovation projects in the suburban districts of Daxing and Fangshan, it said.

Beijing is among six provincial-level regions nationwide to pilot the over-the-counter government bond issuance at commercial banks to smaller investors starting this week.

Previously, local government bonds were only sold and traded on the interbank bond market and on domestic stock exchanges. The investors mainly included banks, securities firms and fund management companies.

The move is of great significance in terms of broadening the channels for bond issuance by local governments, implementing the proactive fiscal policy and diversifying investors in local government bonds, as well as expanding channels for property-based earnings by offering more investment choices to individuals, small and medium-sized institutions, said Han Jie, spokesperson of the finance bureau.

China's local governments ramped up bond issuance in the first two months of the year to ensure enough funding for major projects and stabilize investment.