NHAI to Launch Green Bonds Worth ₹1,000 Crore for Eco-Friendly Projects

New Delhi: The National Highways Authority of India (NHAI) has announced plans to issue green bonds worth ₹1,000 crore to fund various environment-friendly initiatives on the Delhi-Mumbai Expressway project. According to an official statement released on Thursday, the funds will support measures such as solar-powered lighting, rainwater harvesting systems, and wildlife underpasses to enhance ecological sustainability along the expressway.

The bonds will be issued by NHAI’s wholly owned Special Purpose Vehicle (SPV), DME Development Ltd (DMEDL), under a closed bidding system. The total issue size will be ₹1,000 crore, with a base issue of ₹500 crore and a green-shoe option to retain oversubscription up to ₹500 crore. This groundbreaking initiative is the first-of-its-kind green bond issue in the Roads and Highways sector and is scheduled to launch in the second week of December 2024. The process will comply with the government’s sovereign green bonds framework, international protocols, and SEBI guidelines.

The funds raised will be directed toward sustainable activities, including avenue and median plantation, animal underpasses, natural stormwater drainage systems, solar-powered streetlights, waste recycling and reuse, and rainwater harvesting. NHAI Chairman Santosh Kumar Yadav highlighted the initiative as part of the organization’s commitment to environmental sustainability, stating, “This move aligns with our vision of creating greener national highways. It also encourages investment in eco-friendly projects while reducing energy consumption and the environmental impact of vehicular emissions.”

The issuance of green bonds is expected to diversify DMEDL’s investor base by attracting ESG (Environmental, Social, and Governance)-focused investors while enhancing its financial performance through lower borrowing costs. The initiative also aims to promote long-term savings by cutting energy consumption and mitigating emissions.

To ensure compliance, DMEDL has appointed Care Edge Analytics as the Third-Party Reviewer (TPR), which has certified the green activities proposed under this project. Incorporated in August 2020, DMEDL is responsible for the financing, construction, and operation of the Delhi-Mumbai Greenfield Expressway. It has received a AAA rating from CRISIL, CARE, and India Ratings.

DMEDL has set a target to raise ₹48,000 crore through loans and bonds for the expressway and has already secured approximately ₹42,000 crore to date. This green bond issue is another step toward achieving sustainable development while meeting financial goals for one of India’s most ambitious infrastructure projects.