In a pioneering move for the roads and highways sector, the National Highways Authority of India (NHAI) is set to raise ₹1,000 crore through green bonds. Issued under its special purpose vehicle, DME Development, the proceeds will fund environmentally sustainable initiatives along the Delhi-Mumbai Expressway, the country’s costliest highway project.
The green bonds, expected to launch in the second week of December 2024, will follow the Government of India’s sovereign green bond framework, international protocols, and SEBI guidelines. The issuance will consist of a base size of ₹500 crore, with an additional green-shoe option to retain oversubscription of up to ₹500 crore, making it a first-of-its-kind effort in India’s infrastructure financing landscape. The funds raised will support various eco-friendly measures, including avenue and median plantations, construction of animal underpasses, rainwater harvesting systems, renewable-energy-powered streetlights, and waste recycling mechanisms. These initiatives aim to reduce the expressway’s carbon footprint while promoting long-term environmental sustainability.
Santosh Kumar Yadav, Chairman of NHAI, highlighted the importance of the green bonds in driving eco-conscious investment in the roads and highways sector. “This initiative will facilitate long-term cost savings by reducing energy consumption and minimising vehicular emission impacts. It’s a significant step toward balancing development with environmental responsibility,” he stated. The Delhi-Mumbai Expressway, spanning 1,386 km, is a cornerstone of India’s infrastructure growth strategy, connecting major industrial hubs while supporting the country’s net-zero emissions goals. NHAI’s SPV, DME Development, uses toll securitisation to raise debt, leveraging the expressway’s future toll revenue.
With ₹42,000 crore already secured from banks and financial markets, DME Development aims to raise a total of ₹48,000 crore for the project. The green bond issuance not only underscores the importance of sustainable infrastructure but also reinforces India’s commitment to integrating green principles into its mega infrastructure projects. This bold financing strategy is expected to set a benchmark in combining sustainable development with innovative funding mechanisms, paving the way for more eco-conscious infrastructure initiatives in the country.
