India: OSE InvIT (AIIB-00084)

Countries
  • India
Where the impacts of the investment may be experienced.
Financial Institutions
  • Asian Infrastructure Investment Bank (AIIB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Bank Risk Rating
A
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Jun 18, 2018
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Oriental InfraTrust
The holder of the loan, grant, or other investment.
Sectors
  • Finance
  • Transport
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Equity
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 50.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Loan Amount (USD)
$ 50.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Primary Source

Original disclosure @ AIIB website

Updated in EWS May 13, 2020


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Project Description

According to bank documents, "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."

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."

Investment Description
  • Asian Infrastructure Investment Bank (AIIB)
Private Actors
Contact Information

AIIB

Prakash Bajoria

Senior Investment Officer

prakash.bajoria@aiib.org

Borrower

Oriental InfraTrust

Gaurav Puri

Compliance Officer

gauravpuri@orientalindia.com

ACCOUNTABILITY MECHANISM OF AIIB

In addition, the AIIB has a Bank Oversight Mechanism. According to AIIB's policies, "people who believe they have been or are likely to be adversely affected by a failure of the Bank to implement the ESP may also submit complaints to the Bank's oversight mechanism in accordance with the policies and procedures to be established by the Bank for such mechanism." However, at the time of writing, it is unclear what the exact scope and function of this Oversight Mechanism will be.