IFC and Cube InvIT Launch India’s First Road Sector Sustainability-Linked Bond

The NAM Expressway plays a vital role in connecting two major economic hubs, enhancing trade and mobility, and reducing travel time via the shortest route between Chennai and Hyderabad.

The International Finance Corporation (IFC) has announced an ₹860 crore (~$98.35 million) investment in India's first sustainability-linked bond (SLB) in the road sector, issued by Cube Highways Trust (Cube InvIT) [NSE/BSE: CUBEINVIT/543899]. Managed by Cube Highways Fund Advisors Pvt. Ltd., one of India's largest road sector infrastructure investment trusts (InvITs), this pioneering SLB is a significant step in aligning infrastructure growth with environmental, social, and governance (ESG) standards.

The proceeds from this landmark SLB will finance the acquisition of NAM Expressway Limited (NAM), a critical highway connecting Chennai and Hyderabad, and further Cube Highways Trust's long-term corporate goals, including sustainability and inclusion initiatives. IFC's anchor investment aims to catalyze additional private capital, accelerating advancements in India's road infrastructure while supporting the country's climate resilience agenda.

The NAM Expressway plays a vital role in connecting two major economic hubs, enhancing trade and mobility, and reducing travel time via the shortest route between Chennai and Hyderabad. Cube Highways Trust emphasizes that this SLB aligns with their strategy to drive sustainable growth, with measurable outcomes linked to environmental impact, such as reduced emissions and energy efficiency improvements.

Vinay Sekar, CEO of Cube InvIT, stated, "The issuance of this SLB highlights Cube InvIT's ability to leverage its debt capacity for accretive acquisitions. NAM Expressway, with its strong traffic fundamentals, is a valuable addition to our portfolio. This transaction, in partnership with IFC, positions us at the forefront of sustainable practices in the Indian highway sector."

IFC's Regional Director for South Asia, Imad N. Fakhoury, remarked, "This landmark SLB exemplifies our commitment to driving sustainable infrastructure in India. By partnering with Cube Highways Trust, IFC aims to foster measurable impact, promote private sector investment, and advance India's infrastructure resilience."

Additionally, Pankaj Vasani, Group CFO of Cube InvIT, noted that this issuance is part of Cube InvIT's broader plan to integrate ESG principles into its funding strategy. "This SLB is the first in a planned series that will transform India's highways while adhering to the highest ESG standards," he said.

Jason Pellmar, IFC's Regional Industry Manager for Infrastructure in India, Bhutan, and Maldives, added, "Efficient, sustainable road infrastructure is vital for India's economic growth. IFC is proud to back Cube Highways Trust in this endeavor, driving private investment and sustainable development."

This pioneering SLB marks a major advancement in India's road infrastructure financing landscape, aligning investments with sustainable outcomes and setting a precedent for future infrastructure projects that prioritize ESG impact.