SINGAPORE--(BUSINESS WIRE)--Cube Highways and Infrastructure III Pte. Ltd. (Cube Highways) has signed an agreement with KNR Constructions Limited and KNR Srirangam Infra Pvt. Ltd. to acquire a new highway project in India. Using the Hybrid Annuity Model (HAM), the project will construct and operate nearly 160 lane-kilometers in the state of Tamil Nadu.
HAM projects are a hybrid between conventional EPC contracts and BOT (Annuity) projects using an innovative concession model developed by the National Highway Authority of India (NHAI). Under the concession, 40 percent of project cost will be paid by NHAI during the construction phase with the balance distributed as regular annuity payments on a fixed amortization schedule over a 15-year operational period. The new HAM business line created within Cube Highways demonstrates the ability of a platform led strategy to identify and capitalize on specialized investment opportunities within a sector.
“The HAM model offers robust growth potential for the Indian highways sector and we are excited to partner with KNR Constructions, one of the leading construction companies in India,” said Gautam Bhandari, Director of Cube Highways and Partner of I Squared Capital. “We remain keen to expand our presence in this space by working with quality developers with proven execution capabilities.”
“The steady annuity income from HAM projects will diversify the current Cube Highways portfolio of traffic-linked toll roads. Our experienced in-house project management and engineering team will closely monitor all phases of construction to ensure that the roads are delivered on time and within budget,” said Dr. Harikishan Reddy, CEO of Cube Highways Advisors. “With this addition, we continue to focus on building a robust portfolio of long-term infrastructure assets and improving safety levels and the customer experience on Indian highways for millions of people across India.”
The transaction is contingent upon customary regulatory and lender approvals. The acquisition of equity will be phased in accordance with the terms of the respective concession agreement.
About Cube Highways: Cube Highways and Infrastructure Pte. Ltd. (Cube Highways) is a Singapore-based company investing in road and highway projects, along with other select infrastructure sectors in India. Cube Highways is an independent, professionally-managed platform leveraging the extensive transportation experience of its management and execution advisory teams. Shareholders of Cube Highways are leading international investors consisting of I Squared Capital, a wholly-owned subsidiary of the Abu Dhabi Investment Authority, International Finance Corporation, and a consortium of Japanese investors including Mitsubishi Corporation, Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development, East Nippon Expressway Company Ltd and Japan Expressway Company International Ltd. Cube Highways and Infrastructure III Pte. Ltd. was formed by I Squared Capital and a wholly-owned subsidiary of the Abu Dhabi Investment Authority and is an affiliate of Cube Highways.
