VA Tech Wabag achieves financial closure of HAM-based Namami Gange project in WB
VA Tech Wabag has completed financial closure for its hybrid annuity model (HAM) sewage infrastructure project received from the Kolkata Metropolitan Development Authority (KMDA).
The Rs 575-crore concession agreement for the International Finance Corporation (IFC) funded project was recently signed under the Namami Gange programme administered by the National Mission for Clean Ganga (NMCG) and marks the financial closure on the company’s first HAM project.
The scope of work includes engineering, supply and construction of new sewage treatment plants, renovation and upgradation of the existing sewage treatment plants, rehabilitation of pumping stations and other associated infrastructure in Kolkata.
The company would execute engineering, procurement and construction (EPC) portion of this project in 24 months followed by O&M (operation and maintenance) contract spread over 15 years.
Once complete, the project with a cumulative waste-water treatment capacity of 187 MLD would contribute to reducing the discharge of untreated sewage into the Ganga from West Bengal by about 15 per cent.
The EPC portion of the project is to be funded by a mix of NMCG grant, equity and debt. While 40 per cent of the EPC cost would be funded by NMCG grant during the construction period, remaining 60 per cent will get funded by a mix of debt and equity. The company had raised debt from a consortium comprising International Finance Corporation and Tata Cleantech Capital Ltd.
“WABAG is a proud contributor to the Prime Minister’s flagship Clean Ganga Mission. Today, WABAG is committed to managing over 195 crore litre each day to rejuvenate Aviralta & Nirmalta of River Ganga. This is a proud moment for WABAG as we achieve financial closure on our first HAM project. We thank KMDA and NMCG for the confidence reposed in us. We believe that this milestone achieved in association with reputed and global institutions like IFC, TCCL and EverSource Capital shall pave way for many such opportunities in the future”, said Director & Chief Growth Officer and Head of Capital Projects S Varadarajan.
VA Tech Wabag has been following an asset light principle and has been bidding for projects that have secured funding from multilateral agencies. It has also signed an agreement with Kathari Water Management Private Limited (Kathari Water), a wholly owned subsidiary of EverSource Capital, fund manager for Green Growth Equity Fund (GGEF), which will be its investment partner in the project.
GGEF is established with anchor investment from National Investment and Infrastructure Fund (NIIF) anchored by Government of India and the UK’s Foreign, Commonwealth & Development Office (FCDO).
“IFC’s investment in this project will help develop a sustainable wastewater infrastructure in Kolkata. We are delighted to support WABAG’s first HAM project, in partnership with EverSource Capital and Tata Cleantech Capital, which will enhance private sector engagement in this critical space, promote market competitiveness, and demonstrate the bankability and replicability of similar projects in 11 Indian states in the Ganges basin and across the country”, said IFC Country Head – India Jun Zhang.
