The total size of the issue will be up to INR 1,000 crore under a closed bidding system, with the base issue size being INR 500 crore. There will be a greenshoe option to maintain oversubscription up to INR 500 crore.
The first-of-its-kind green bond issue in the road and highway sector is expected to be launched in the second week of December 2024 and will be completed in strict compliance with the Government of India's Government Green Bond Framework, international protocols and SEBI guidelines.
The proceeds from the issuance of Green Bonds will be used for activities such as spending on avenue planting, median planting, construction of animal underpasses, natural stormwater drainage, renewable energy (solar) street lighting, waste recycling and reuse, and rainwater harvesting.
Commenting on this initiative, NHAI Chairman Santosh Kumar Yadav said, “This initiative is part of our vision to create greener national highways and reiterates NHAI's commitment to environmental sustainability.” The green bonds will help attract investments in environment-friendly projects, particularly in roads – and highway sector, and enable long-term cost savings by reducing energy consumption and reducing the impact of vehicle exhaust on the environment.”
The issuance will help improve DMEDL's financial performance in terms of total cost of borrowing and diversify its investor base by attracting investors with a focus on “environmental, social and governance”. DMEDL appointed Care Edge Analytics as the external auditor (TPR) that identified and certified DMEDL's environmentally friendly activities.
Established in August 2020, “DME Development Ltd.” is a wholly owned Special Purpose Vehicle (SPV) of NHAI for financing, construction and operation of the Delhi-Mumbai Greenfield Expressway and has AAA rating from CRISIL, CARE and India rating received.
DMEDL aims to raise around INR 48,000 crore from banks and the financial market through loans and bonds and has so far successfully raised around INR 42,000 crore for the implementation of the Delhi-Mumbai Expressway project.