IRB MP Expressway Pvt. Ltd, a special purpose vehicle (SPV) of India’s largest highways infrastructure developer, IRB Infrastructure Developers Ltd, has successfully achieved the financial closure for its first and the country’s largest toll-operate-transfer (TOT) project, the Mumbai-Pune Expressway.
As a commitment towards the fee obligations in the concession agreement, IRB made the payment of the first tranche of Rs 65 billion as an upfront sub-concession fee to the Maharashtra State Road Development Corp. (MSRDC) on June 18.
While commenting on the development, Virendra D Mhaiskar, Chairman & Managing Director, IRB said, “Achieving financial closure, amounting to a whopping Rs 66.1 billion debt for India’s largest road TOT project, in these difficult times was a massive ordeal, especially with more than half the stipulated time being tied away in lockdown. This feat validates lenders’ trust in the project’s merits, the company’s financial track record and creditworthiness, as also our domain expertise and execution capabilities in developing and managing large highway infrastructure.”
The project length of the Mumbai-Pune Expressway is 205.4 km, including expressway and section of NH-48, the old Mumbai-Pune corridor. After having managed the concession for 15 years until August 2019, IRB Infra won this concession again in February 2020 for another 10 years and 2 months.
This is also India’s single largest concession under the TOT model for tolling and O&M, which commenced from March 1, 2020. The total sub-concession fee amounts to Rs 82.62 billion, of which IRB Infra has paid MSRDC the upfront fee of Rs 65 billion. Further staggered payments of Rs 8.5 billion in year two, Rs.8.5 billion in year three and Rs 620 million in year four have been tied and will be made as per the concession guidelines.
IRB has infused the entire project equity of Rs 14.38 billion upfront. The State Bank of India and Union Bank of India are lenders to the Project
With this, IRB’s asset base has expanded to Rs 450 billion, which is the largest in the country’s roads & highways sector.