DME Development Ltd, an entirely claimed auxiliary of NHAI, has sent off the first-of-its-sort Green Bonds issue for the roads and highways sector in India worth ₹775 crore. It is the first-of-its-sort drive in quite a while and highways sector and is supposed to set another benchmark, drawing in broadened financial backers to advance practical framework development.
What are Green Bonds?
Green bonds are a form of fixed-income security whose aim is to fund projects meant to encourage environmental sustainability. DMEDL’s green bonds will finance projects promoting both environmental protection and infrastructural development. These initiatives include the planting of avenues and medians, construction of animal underpasses, and the installation of renewable energy, such as the installation of solar-powered streetlights.
Green bond issuances mark a major step in aligning infrastructure growth with global sustainability goals, luring investors eager to support environmentally conscious projects.
Role played by NHAI in developing sustainable infrastructure
In response to this, Santosh Kumar Yadav was quoted saying that he felt elated with the amount of success this Green Bonds issuance has attracted, saying it has been very important and a landmark endeavor by NHAI. He feels that this will open up it further to the participation of wide, sustainable interest in the infrastructure development across India.
This was, according to Yadav, a first-of-its kind initiative for the roads and highway sector that will benchmark the same and encourage diverse set of investors to participate.
“I find great value in such innovative financial instruments in promoting eco-friendly infrastructure development.”.
The Green Bonds issue was brought out through a closed bidding system. The total issue size came to ₹775 crore. The initial base issue size had been ₹500 crore. Furthermore, the issue also provided the green-shoe facility to carry the over-subscription to the tune of ₹275 crore. The bonds fetch a yield of 7.23% per annum, which is a reasonably attractive rate for investors desirous of earning a financial return along with achieving the intended environmental benefit.
The Green Bonds will be utilized in all activities related to the infrastructure development process, which are environmentally friendly. Such activities include avenue and median plantations, construction of animal underpasses, natural stormwater drainage systems, solar-powered streetlights, waste recycling and reuse programs, and rainwater harvesting initiatives. All of these projects decrease the ecological footprint of road developments, while offering long-term advantages to local communities and the environment.
Sustainability in Infrastructure Development by DME Development Ltd
DME Development Ltd is an NHAI-formed SPV in August 2020. The Company’s principal objectives are the funding, construction, and operating of the Delhi-Mumbai Greenfield Expressway, arguably one of India’s biggest Infrastructure schemes aimed at boosting connectivity from and into one of India’s two prominent economic centres-the country-the country: Delhi to Mumbai, a similarly-sized city on India’s Western Sea cost.
It’s apparent from the high credit ratings of AAA issued by CRISIL, CARE, and India Rating that DMEDL stands highly with regard to its strong financial health and credibility in the market. The overall amount that DMEDL looks at in raising loans and bonds in the amount of ₹48,000 crores to fund a multiplicity of projects in infrastructure development amounts already to ₹43,000 crores raised towards the Delhi-Mumbai Expressway.
Green Bonds: The Future of Infrastructure Finance
This is the first issuance of Green Bonds and a landmark moment in financing India’s infrastructure in an innovative financial instrument that enables both economic growth and the imperatives of protection of the environment.
This initiative has not only secured the confidence of investors but has also demonstrated the fact that organizations like NHAI and DMEDL can bring green finance into large-scale infrastructure development. NHAI is thus opening up an example for the Indian and global infrastructure sectors in taping into green finance.
Conclusion
DME Development Ltd has now successfully issued ₹775 crore in Green Bonds marking a new era of sustainable infrastructure development in India. This is at a time when environmental responsibility is paramount to the roads and highways sector. The funds fetched from this bond issue shall be utilized for eco-friendly initiatives and, hence, is considered a giant leap by India to integrate sustainability into its infrastructure projects. This, too, does indicate that the country is ready in attracting diversified investors and having a more sustainable and resilient infrastructure system for the future. And with NHAI moving ahead on its commitment to green growth, such innovative financing solutions will only echo throughout the infrastructure industry.
Refer :
PIB, Link to article
Also read : NHAI Set to Issue Rs 1,000 Crore Green Bonds for Sustainable Infrastructure Growth