NHAI gets go-ahead to generate ₹50,000-cr via SPV

The National Highways Authority of India (NHAI) has been given a green signal to go ahead with the plan to raise ₹50,000 crore through a special purpose vehicle (SPV) with the National Investment and Infrastructure Fund (NIIF) for the Delhi-Mumbai expressway project, and the road-building agency will appoint a merchant banker soon. NHAI's external financing route was approved at a recent meeting with the finance ministry and the model would be finalized by next month. This comes amid the Covid-19 virus outbreak as government spending remains muted and as NHAI looks to spur investment in road projects across the country. There are gaps in its requirement which have to be filled. The funds generated through NIIF will be spent over the next three years. In July last year, the infrastructure funding body entered into an agreement with the national highways building authority to invest in road projects. The SPV will allow the NIIF to take sovereign funds on board and can co-invest in projects of the NHAI. All construction risk and land acquisition costs will be borne by NHAI under the SPV. And in the first tranche, the construction cost of the 1,320 km long Delhi-Mumbai expressway will be funded. NHAI has proposed to use the SPV funding mode for greenfield projects and expressways.