NHAI’s Set To Issue Green Bond Worth ₹1,000 Crore

The National Highways Authority of India (NHAI) has announced that its fully owned Special Purpose Vehicle (SPV), DME Development Limited (DMEDL), will issue green bonds. The funds raised will be allocated to implementing eco-friendly initiatives for the Delhi-Mumbai Expressway project.

Green Bond Issue Details

DMEDL is set to issue green bonds under a closed bidding system with an aggregate total size of up to ₹1,000 Crores. The base issue size will be ₹500 Crore, with a green-shoe option to retain oversubscription up to an additional ₹500 Crore. This green bond issuance is expected to be the first of its kind in the Roads and Highways sector and is scheduled to launch in the second week of December 2024. The process will be conducted in full compliance with the Government of India’s sovereign green bonds framework, international protocols, and SEBI guidelines.

Utilisation of Proceeds

The funds raised from the green bonds will be used to finance various environmentally sustainable activities along the Delhi-Mumbai Expressway, including:

• Avenue and median plantation
• Construction of animal underpasses
• Development of natural stormwater drainage systems
• Installation of solar-powered streetlights
• Waste recycling and reuse initiatives
• Rainwater harvesting measures

These measures are part of DMEDL’s broader effort to ensure the project’s environmental sustainability.

Financial Impact and Investor Attraction

The green bond issue is expected to improve DMEDL’s financial performance by lowering overall borrowing costs. It will also help diversify the investor base by attracting investors focused on Environmental, Social, and Governance (ESG) criteria. To ensure transparency and accountability, DMEDL has appointed Care Edge Analytics as a Third-Party Reviewer (TPR), who will verify and certify the green activities associated with the project.

DMEDL Overview

Incorporated in August 2020, DME Development Ltd. is a wholly owned SPV of NHAI tasked with financing, constructing, and operating the Delhi-Mumbai Greenfield Expressway. The company has received AAA ratings from CRISIL, CARE, and India Rating. To date, DMEDL has successfully raised around ₹42,000 Crore of its target ₹48,000 Crore through loans and bonds for the expressway project’s implementation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.