The 1054 European Investment Bank (EIB) is reported to be in talks with the sponsors of the A-66 Benavente-Zamora highway public private partnership (PPP) in Spain over a possible bond financing deal, which would see the Bank provide subordinated debt for an A-rated bond issue.
The possible bond issue would be a further greenfield project to launch the1116 European Union’s Project Bond 2020 initiative, with its initial pilot stage being managed by the EIB.
Among options reportedly being discussed is a bridge loan in the construction phase of the A-66 taken out by a bond after completion, and a short bridge facility of possibly one year taken out by a bond while still in construction.
The A11 Bruges-Westkapelle DBFM project in Belgium is at least one other PPP project the EIB is planning to use as a pilot this year. The bank has US$300million (€230million) of seed funding for the initiative, which is expected to allow it to lend around $918.4million (€700million), as reported last year. The subordinated loans can cover up to 20% of project debt.
Spain’s Ministry of Development finally awarded the A-66 project to the930 Cintra/976 Acciona/7167 Meridiam consortium at the end of last month. It was unknown if the new government would continue with the procurement or abandon it, having previously criticised the project as too expensive. However, the winning bid came in at €998million, considerably less than the €1.33billion originally budgeted for the contract value.
Sources agreed that the A-66 project would take until around the end of the year to reach financial close, given that it had only just been allowed to proceed. The project is expected to have an upfront cost of around €220million and the EIB is considering financing up to €100million in one form or another. The road is part of the Trans-European Transport Network, making it a priority for EIB support. Both Spanish and international banks are interested in lending, a source said.
The availability-based DBFOM project, the largest PPP contract awarded by the Spanish government for over 12 months, comprises the construction of 49km of new dual carriageway from Benavente to Zamora in the region of Castilla y León, via Santovenia del Esla and Fontanillas de Castro, as well as a rest area and site for roadside commercial developments. The concession is for 30 years following signing, including 24 months for construction.
The road forms the final missing link in the A-66, known as the ‘Autovia de la Plata’ (Silver Highway) which runs north-south across the Iberian peninsula. When complete, the A-66 will cross 809km from Gijón on the Cantabrian coast to Seville in Andalucia.
The possible bond issue would be a further greenfield project to launch the
Among options reportedly being discussed is a bridge loan in the construction phase of the A-66 taken out by a bond after completion, and a short bridge facility of possibly one year taken out by a bond while still in construction.
The A11 Bruges-Westkapelle DBFM project in Belgium is at least one other PPP project the EIB is planning to use as a pilot this year. The bank has US$300million (€230million) of seed funding for the initiative, which is expected to allow it to lend around $918.4million (€700million), as reported last year. The subordinated loans can cover up to 20% of project debt.
Spain’s Ministry of Development finally awarded the A-66 project to the
Sources agreed that the A-66 project would take until around the end of the year to reach financial close, given that it had only just been allowed to proceed. The project is expected to have an upfront cost of around €220million and the EIB is considering financing up to €100million in one form or another. The road is part of the Trans-European Transport Network, making it a priority for EIB support. Both Spanish and international banks are interested in lending, a source said.
The availability-based DBFOM project, the largest PPP contract awarded by the Spanish government for over 12 months, comprises the construction of 49km of new dual carriageway from Benavente to Zamora in the region of Castilla y León, via Santovenia del Esla and Fontanillas de Castro, as well as a rest area and site for roadside commercial developments. The concession is for 30 years following signing, including 24 months for construction.
The road forms the final missing link in the A-66, known as the ‘Autovia de la Plata’ (Silver Highway) which runs north-south across the Iberian peninsula. When complete, the A-66 will cross 809km from Gijón on the Cantabrian coast to Seville in Andalucia.
