Adani Group is in talks with State Bank of India to raise around Rs 12,000 in long-term project loans to be used in the construction of the Ganga highway, said to be the longest in the country, which connects Meerut to north- western Uttar Pradesh. with Prayagraj it connects to the east of the state.
SBI is involved in a trafficking investigation before the terms of the loan were finalized, three people familiar with the matter told ET. In December, Adani Enterprises received contracts from the government of Uttar Pradesh to build three sections of the 594 km Ganga highway. The fourth tranche was awarded to IRB Infrastructure. AEL's work quota is 80% of the overall project. The loan will have a longer duration - between 10 and 30 years - although the terms have not yet been determined.
The loan, once concluded, can be offered at a high figure in the range of 7-9%, the sources said. SBI can resell part of the total loan granted to other local banks. Hide quoted text The Adani Group and SBI did not respond to ET's requests. Apparently, Ganga Expressway will be the longest highway in India to be implemented on a Design, Build, Finance, Operate and Transfer (DBFOT) basis.
"The bank is carrying out a road traffic investigation with the help of an outside agency which could be one of the Big Four," said one of the people quoted above. This survey mainly forecasts the road toll potential. This helps lenders make decisions about leverage. A higher toll potential reduces shareholding. The leverage can be as high as 80:20 when there are no parallel roads, increasing the prospect of higher toll revenue. The Ganga Expressway can have eight lanes and is expected to be completed in 2024.
It would be built on 6,500 acres of land. The estimated cost of the three AEL awards is Rs 17 billion. Overall, it offers huge commercial real estate opportunities for Uttar Pradesh as the project covers a dozen densely populated districts including Hapur, Bulandshahar, Badaun and Raebareli. CARE Ratings gave Adani Enterprises an A+ (stable outlook) rating for its banking facilities, citing the group's financial flexibility and significant investments.
In the expressway segment, AEL now has 14 projects, including three entirely new major sets of Ganga Expressway. The rest of the projects are mainly HAM (Hybrid Annuity Model) projects.
Two months ago, Navi Mumbai International Airport, a subsidiary of Adani Enterprises, secured a long-term line of credit from SBI for the greenfield project. The bank had committed the total debt requirement of Rs 12,770 crore for the ambitious project.
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