European DFI Foray: OeEB becomes the first European DFI to lend to private sector project under Namami Gange’s sewage water treatment HAM /PPP model
Vishvaraj Environment Pvt. Ltd. (VEPL), India’s leading ESG-focussed water utility firm, announced that it has achieved the Financial Closure for its Hybrid Annuity Model (HAM) project at Maheshtala under the Namami Gange programme administered by the National Mission for Clean Ganga (NMCG).
VEPL, through its subsidiary Maheshtala Waste Water Management Pvt. Ltd. (MWWMPL), had earlier signed a Rs. 273 crore HAM concession agreement under the Namami Gange programme administered by the National Mission for Clean Ganga (NMCG) with Kolkata Metropolitan Development Authority (KMDA ) as the principal executing agency, which included the scope of designing, financing, constructing the sewage treatment plants, pumping stations and other associated infrastructure at Maheshtala. The project involves construction period of 2 years and 15 years of O&M, backed by annuity from NMCG.
This will contribute to India’s movement towards achieving Sustainable Development goals, with strong positive impact on the SDG-6 (Water) and SDG -14 (life under water) parameters. The treated water will be released back into the Ganga, where millions of people are dependent for their livelihood on the river in the downstream region.
The project cost is to be funded by a mix of NMCG Grant, Equity and Debt, with entire project debt of over Euro 13 million to be funded by Oesterreichische Entwicklungsbank AG, the Development Bank of Austria (“OeEB”). This transaction marks the first direct lending by a European DFI in NMCG’s HAM projects. Deloitte India was the financial advisor for this transaction.
The signing event was conducted at NMCG office on May 25, 2022 in the presence of the Honourable Ambassador of the Republic of Austria to India, Her Excellency Katharina Wieser and Mr. Hans-Jörg Hörtnagl, Austrian Trade Commissioner to India.
Speaking at the event, the Austrian Ambassador welcomed the participation of the Austrian development bank in India’s clean ganga mission project which has highly positive social impact on millions of people, and wished for greater participation from Austria in future NMCG projects. She wished best luck to the Vishvaraj Group for implementation of this project, and wished for continued Austrian involvement in its future projects. The Austrian trade commissioner mentioned the high level of technical expertise available with Austrian companies in the field of environment protection and wished for greater future participation from Austria in NMCG projects.
Commenting on this signing event, Shri G. Asok Kumar, Director General, NMCG, said: “Market for the municipal waste water management on hybrid annuity based PPP mode (HAM) is maturing with increasing bidders participation with every project and is happy to note Development Bank of Austria funding MWWMPL for this project indicating increasing credibility of HAM model. He also expressed hope that MWWMPL shall be able to complete the project well before the schedule and more international funding support comes into the Municipal Waste Water Sector on HAM Model.”
Smt. Antara Acharya, CEO of KMDA, congratulated the NMCG and VEPL Group for achieving financial closure. This project has highly positive social impact for the people of the State of Bengal and would benefit millions of people in the downstream areas.
Commenting on the signing event, Sabine Gaber, Member of OeEB’s Executive Board, said: “Clean water is important for human health, for the environment, climate and biodiversity as well as for agricultural productivity and thus food security. We are therefore happy to support this important project that contributes to the Indian Government’s Clean Ganga-programme.”
Commenting on this milestone achievement, Mr. Arun Lakhani, CMD, VEPL, said: “VEPL is proud to contribute to our Prime Minister’s flagship Clean Ganga project. This is a landmark achievement which also marks the first direct lending by a European DFI in a NMCG HAM project. We thank KMDA and NMCG for the confidence reposed in us. We are confident that this milestone achievement will pave the way for further DFI participation in the water ESG project space”.
Speaking on the occasion, Sidhaartha Lakhanee, ED, VEPL, said: “We thank OeEB, NMCG and KMDA for their support. At VEPL, we are committed to sustainability and SDG goals of the Government of India, and we look forward to many more projects in PPP/HAM under NMCG as well as Amrit 2.0.”