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India: OSE InvIT

SUMMARY

STATUS
Approved
MEMBER
India
SECTOR
Transport
E&S CATEGORY
Category A
PROJECT NUMBER
00084

FINANCING

PROJECT TYPE
Cofinanced
APPROVED FUNDING
USD50 million
FINANCING TYPE
Nonsovereign

TIMELINE

CONCEPT REVIEW
May 9, 2018
APPRAISAL REVIEW/FINAL REVIEW
June 18, 2018
FINANCING APPROVAL
August 16, 2018

OBJECTIVE

The objective of the Project is to mobilize long-term private institutional capital for financing roads and highways in India. The private capital mobilized will be invested in both greenfield infrastructure development and operational infrastructure assets.

DESCRIPTION

Oriental Structural Engineers Private Limited (OSEPL) and its wholly owned subsidiary, Oriental Tollways Private Limited (OTPL), jointly referred to as the Sponsors, have set up an Infrastructure Investment Trust, a new investment vehicle namely Oriental InfraTrust (InvIT). The InvIT has acquired a portfolio of five operating road assets from the Sponsors and will now be responsible for the operation and maintenance of the five assets till the end of the remaining concession period pursuant to the concession agreement. The road assets were initially awarded to the Sponsors by the National Highways Authority of India (NHAI), the concessioning authority, under a build, operate and transfer (BOT) or design, build, finance, operate and transfer (DFBOT) model. The five road assets that have been acquired by the InvIT are:

  • Nagpur Byepass project: an approximately 117km section of NH-7 including the Madhya Pradesh/Maharashtra border to Nagpur section and the Nagpur to Hyderabad section in Maharashtra;
  • Indore - Khalghat project: an approximately 72km section of NH-3 between Indore and Khalghat in Madhya Pradesh;
  • Etawah - Chakeri project: an approximately 160km section of NH-2 between Etawah and Chakeri in Uttar Pradesh;
  • Hungund - Hospet project: an approximately 97km section of NH-13 between Hungund and Hospet in Karnataka; and
  • Nagpur - Betul project: an approximately 175km section of NH-69 between Nagpur and Betul in Madhya Pradesh.

All the above road assets, other than the Nagpur Betul project, are operated on a toll basis. The Nagpur Betul project is operated on an annuity basis.

The InvIT has appointed Indian Technocrat Limited as the investment manager, and OSEPL as the project manager and the major maintenance manager for the operation and maintenance of the road assets.

 

PROJECT FINANCING

The investment by AIIB is in the form of equity in Indian Rupee equivalent of up to USD50 million in the units of the Oriental InfraTrust.

ENVIRONMENTAL AND SOCIAL INFORMATION

The Project has been co-financed with the IFC and other financial institutions and has been prepared in accordance with the IFC's Policy on Environmental and Social Sustainability (IFC Policy) and Performance Standards on Environmental and Social Sustainability (IFC PSs) (2012). AIIB is satisfied that: (i) the IFC Policy and IFC PSs are consistent with AIIB’s Articles of Agreement and are materially consistent with AIIB’s Environmental and Social Policy (ESP) and relevant Environmental and Social Standards (ESSs) and (ii) the monitoring procedures that IFC has in place are appropriate for the Project. Consequently, as permitted by the ESP, AIIB will apply the IFC Policy and IFC PSs to this Project.

Additional information can be found in the project summary.

PROJECT TEAM LEADER

Prakash Bajoria

Senior Investment Officer

prakash.bajoria@aiib.org

 

BORROWER

Oriental InfraTrust

Gaurav Puri

Compliance Officer

gauravpuri@orientalindia.com

 

IMPLEMENTING ENTITY

N/A

 

PROJECT DOCUMENTS

CLIENT/COFINANCING PARTNER DOCUMENTS

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