NHAI to use InvIT funds for debt servicing

The National Highways Authority of India (NHA) plans to use the funds raised through its InvIT (Infrastructure Investment Trust) “exclusively” for debt servicing, said media reports quoting an RTI query. NHAI's debt burden has crossed Rs 3.4 lakh crore as of September 30, 2023.

“The government has permitted NHAI to utilize the fund raised through NHAI InvIT exclusively for debt servicing,” reports said. In a separate development, the National Highways Infra Trust (NHIT), the investment trust sponsored by the NHAI, plans to raise as much as Rs 9,000 crore after Diwali through a mix of debt and equity, according to media reports.

The NHAI has been quoted saying that it was provided funds by the central government for expenditure and debt servicing. NHAI's mounting debt came into focus after NITI Aayog ordered an evaluation of the authority's work.

NHAI was allocated Rs 1,62,207 crore in Union Budget 2023-24, which was 15 per cent more than the revised estimates for 2022-23. NHAI's total outstanding debt was Rs 3,48,522 crore as of March 2022.

What are InvITs?

Infrastructure Investment Trusts (InvITs) are instruments under the road monetisation plan of NHAI. Road assets are placed under InVITs and the investors can put in money and the income generated from these assets is paid as dividends.

The Union Cabinet in 2019 gave approval to the NHAI to set up InvIT and monetise national highway projects. Canadian Pension Plan Investment Board and Ontario Teachers’ Pension Plan were the anchor investors for the first NHAI InvIT after they picked up 25 per cent equity each.