NHAI To Raise Rs 60,000 Crore Through Securitisation Of Future Toll Collection

The National Highways Authority of India (NHAI) aims to raise Rs 60,000 crore through securitisation of future toll collection from four major under-construction NH projects — three expressways and one economic corridor — in the next three years.

This will be nearly two-third of the funds required for the construction of these highways and will reduce the upfront government investment in the capital intensive projects.

The NHAI is going for this mode of raising funds for new projects after the success of securitisation of future toll in the Delhi-Mumbai expressway project. It has raised around Rs 30,000 crore till now and targets to get another Rs 15,000 crore during this financial year.

In this mode of monetisation, the repayment of principal with assured rate of interest, is linked to the toll collection and it commences one year after the tolling starts.

A senior official said the proposal to set up four self-sustaining special purpose vehicles (SPVs) has been finalised and the NHAI is awaiting the Finance Ministry’s approval.

An SPV each will be set up for Visakhapatnam-Raipur, Delhi-Amritsar-Katra, Amritsar-Jamnagar and Chennai-Bengaluru highways. The road assets will be transferred to the SPV which will manage fund raising, operation and repayment of loan. The capital investment in these projects is around Rs 90,000 crore.

Transferring an asset to SPVs lowers the NHAI debt as it’s shifted to the new entity and does not remain on the books of the highway authority.

The NHAI’s equity in these SPVs will be around Rs 30,000 crore. The remaining Rs 60,000 crore will be raised in the form of term loans and from capital markets through institutional investors.