Friday, June 23, 2023

NHAI will raise Rs 60,000cr through the securitization of the toll kitty

 Delhi, India: In the next three years, the National Highways Authority of India (NHAI) intends to securitize toll collection from four major under-construction NH projects, including three expressways and one economic corridor, in order to raise Rs 60,000 crore. This will reduce the initial government investment in capital-intensive projects and will account for nearly two-thirds of the funds required for their construction.

After the success of securitizing the toll project for the Delhi-Mumbai expressway, NHAI is using this method to raise funds for new projects. It has already raised approximately Rs 30,000 crore and hopes to raise another Rs 15,000 crore this fiscal year. The repayment of principal with an assured rate of interest is linked to toll collection in this method of monetisation and begins one year after tolling begins.

A senior official stated that the NHAI is awaiting approval from the finance ministry for the proposal to establish four self-sustaining special purpose vehicles (SPVs). Visakhapatnam-Raipur, Delhi-Amritsar-Katra, Amritsar-Jamnagar, and Chennai-Bengaluru highways will each have their own SPVs established. The SPV that will handle fund-raising, operation, and loan repayment will acquire the road assets. These projects require a capital investment of approximately Rs 90,000 crore.

The debt of the NHAI is reduced when an asset is transferred to SPVs rather than remaining on the highway authority's books.

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