IFC invests ₹860 cr in India’s first sustainability bonds issued by Cube InvIT

Issued by Cube Highways Trust (Cube InvIT), one of India’s largest road sector-focussed infrastructure investment trusts (InvITs), sustainability-linked bond is a debt instrument whose financial terms are linked to the issuer’s pre-defined sustainability or environmental, social, and governance (ESG) goals.

This SLB—the first by a road InvIT in India—will fund the acquisition of NAM Expressway Limited (NAM), a strategic highway connecting Chennai and Hyderabad, and support Cube Highways Trust’s long-term corporate objectives, including sustainability and inclusion initiatives. 

As anchor investor, IFC’s investment is set to mobilize additional capital, helping drive advancements in India’s road infrastructure while upholding global ESG standards.

Industry insights

As demand for mobility to move people and goods around rises, transport-related emissions are also likely to swell. Sustainability-linked finance (SLF) offers an innovative solution by aligning financing with sustainability efforts, linking proceeds to measurable outcomes, and driving meaningful progress toward a sustainable road transport sector.

In a statement, Vinay Sekar, CEO of Cube InvIT, said, “This transaction demonstrates Cube InvIT’s ability to execute upon its strategy of deploying its debt capacity on accretive acquisitions; NAM is characterized by strong traffic fundamentals and positioned strategically as the shortest route between Chennai and Hyderabad. The SLB also showcases the pioneering role played by Cube Highways along with its longstanding partner IFC, in inculcating sustainable management practices in the Indian highways sector.”

Imad N. Fakhoury, regional director for South Asia, IFC, said, “As the anchor investor, IFC is dedicated to fostering growth and long-term resilience in India’s road networks with a focus on measurable impact. This collaboration highlights the critical role of InvITs in expanding and diversifying sources of investment within the road sector. At IFC, we are committed to advancing innovative financing solutions that support sustainable development across India’s infrastructure landscape.”

Pankaj Vasani, Group CFO of Cube InvIT, said, “This milestone strengthens Cube InvIT’s leadership in sustainable infrastructure finance, making it one of the first highway InvITs to integrate sustainability into its funding strategy. This financing marks the first in a series of SLBs that Cube InvIT intends to issue, which aim to drive the transformation of India’s highway infrastructure while upholding the highest environmental, social, and governance standards.”

Investor information

IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries.

Jason Pellmar, regional industry manager for infrastructure, India, Bhutan and Maldives, IFC, said, “Investing in sustainable road infrastructure is essential for accelerating India’s economic growth, enhancing connectivity, and boosting global competitiveness through efficient logistics. By partnering with Cube Highways Trust on this landmark SLB, IFC is facilitating innovative financing solutions that mobilize private sector investment and elevate infrastructure standards. This initiative aims to strengthen India’s road network and contribute to a more sustainable and resilient future.”

Cube Highways Trust is backed by a diversified investor base, including I Squared Capital, British Columbia Investment Management Corporation, Abu Dhabi’s sovereign investor Mubadala Investment Company, and Japan Highways International BV.

Cube Highways Trust is engaged in implementing the public-private partnership model in the country’s highways sector to operate and manage highway projects in association with the central and state governments.