#AHEM : Annuity Hybrid E-Mobility
PPP Model Annuity Hybrid E-Mobility (AHEM)
AHEM draws upon proven financial model precedents from HAM (Hybrid Annuity Model) launched in 2016.
It is inspired by the HAM model of Shri. Nitin Gadkari Ji, whose introduction in 2015 significantly accelerated road construction. Under HAM, the Government/NHAI pays 40% of the total project expenditure in 10 equal installments on milestones, with the remaining 60% as annuity payments raised in a split of 30% by the road developer and 30% as debt from banks. The government remains responsible for toll collection. The government selects the concessionaire of the project. The Life Cycle Cost is the parameter for bidding. The concession period includes the construction period and 15 years of fixed operations. The concessionaire is responsible for maintaining the project till the concession period comes to an end.
AHEM is derived from HAM and it is a PPP model principally inspired by HAM where assets, typically stations, are allocated for CapEx in a split of 30% to Public Sector, 30% to the private sector and 30% to People (individual or group); the remaining 10% of assets, such as charging depots and control rooms, remain with e-highway state operators. Initial construction of charging infra is backed by Private & Public sectors banks for a moratorium period of 12 months on the basis of allocation affirmation or LC. Land acquisition for stations is carried out on hybrid mode through a combination of NHAI wayside amenity land parcels and direct purchases. Repayments are assured through predetermined annuity structures by monetization of assets and space at stations for various e-mobility and auxiliary activities, like- advertising, roadside assistance, food court, bank ATMs, conference and outlets.
To accelerate highway construction, the government brought the HAM model and aimed to award projects worth more than Rs 40,000 crore on the new hybrid model by March. Within 36 months of the introduction of HAM, out of 123 projects awarded, 121 projects had been sanctioned by 2019. The majority of projects were funded by private banks including NBCC out of the awarded projects, 101 had achieved financial closure by 2019. By the end of the year, the Government of India approved the Hybrid Annuity Model (HAM) for building National Highways (NH) to speed up the construction of roads in the country by renewing the interest of private developers in highway projects and to tap the benefits of long-term funds like pension funds, insurance funds, wealth funds, etc. into the road construction sector. MoRTH had introduced models like HAM and TOT (Toll-Operate-Transfer).
PUBLIC
PRIVATE
In this scenario, a private entity purchases the land for station construction.
PEOPLE
In this case, individuals may offer suitable land as collateral to the bank to obtain a credit line in order to develop the station.
Investment funds for NHEV highway upgradation are utilized under the Annuity Hybrid E-Mobility (AHEM) model. They are protected by four layers of safety nets and three optional financing processes to ensure the allocation of each utility, asset and station.
