The National Highways Authority’s SPV, DMEDL, will issue India’s first green bonds worth ₹1,000 crore, funding eco-friendly measures for the Delhi-Mumbai Expressway, advancing sustainability in the Roads & Highways sector.

Reiterating its commitment to promoting environmental sustainability and the development of green highways, the National Highways Authority of India’s fully owned Special Purpose Vehicle (SPV) ‘DME Development Limited’ (DMEDL) will issue green bonds to raise funds for the implementation of environmentally friendly measures on the Delhi-Mumbai Expressway project. The issue would be held under a closed bidding mechanism, with an aggregate total size of up to ₹ 1,000 crore and a base issue size of ₹ 500 crore.

There would be a green-shoe option for retaining oversubscription up to ₹ 500 crore. The first-ever green bond issue in the Roads and Highways sector is planned to be released in the second week of December 2024, with strict adherence to the Government of India’s sovereign green bonds framework, international conventions, and SEBI standards.

The revenues from the issuance of ‘Green Bonds’ will be used to fund operations such as avenue and median plantation, animal underpass construction, natural stormwater drainage, streetlights powered by renewable energy (solar), waste recycling and reuse, and rainfall gathering.

Commenting on this initiative NHAI Chairman, Shri Santosh Kumar Yadav says, “This initiative is a part of our vision to create greener National Highways and reiterates NHAI’s commitment towards environmental sustainability. The green bonds will help to encourage investment in eco-friendly projects, especially in the Roads & Highways sector and will facilitate long-term cost savings by reducing energy consumption and lowering the impact of vehicular emission on the environment.”

The issuance will help to improve DMEDL’s financial performance in terms of total borrowing costs while also diversifying the investor base by recruiting ‘Environmental, Social, and Governance’ minded investors. DMEDL has engaged Care Edge Analytics as the Third-Party Reviewer (TPR) to identify and certify DMEDL’s Green Activities.

‘DME Development Ltd.’, incorporated in August 2020, is NHAI’s wholly owned Special Purpose Vehicle (SPV) for the funding, building, and operation of the Delhi-Mumbai Greenfield Expressway and has got AAA ratings from CRISIL, CARE, and India Rating. DMEDL seeks to generate approximately Rs. 48,000 crore from banks and the financial markets through loans and bonds and has already raised approximately ₹ 42,000 crore for the Delhi-Mumbai Expressway project.