£2bn UK road PFI reaches financial close

Ferrovial subsidiary Amey has clinched funding for the £2bn Sheffield highway maintenance PFI, a 25-year contract. Lloyds acted as lead MLA and documentation bank on the deal, helping to provide £212 million of debt.

Amey, a UK service provider owned by Spanish developer Ferrovial, has reached financial close on a road maintenance contract awarded by Sheffield City Council, the firm announced yesterday.

The £2 billion (€2.5 billion; $3 billion) Sheffield Highways Project Finance Initiative (PFI) project will see Amey refurbish Sheffield’s highways during the first five years of the contract, with a mandate to then maintain the highways network for a further 20 years.

The Department for Transport will contribute £1.2 billion over the life of the contract, Amey said. “This huge investment will provide us with a highway network and a street scene that will be the best in the country within five years,” remarked Jack Scott.

In a separate release, UK bank Lloyds, 41 percent owned by the UK government, said it had acted as the lead MLA and documentation bank for the project, taking on all ancillary roles including hedge bank, agent bank, security trustee and account bank.

Lloyds said the project will be financed with £212 million of debt, in addition to a £135 million contribution from Sheffield City Council. Lloyds pointed out it was lending £56 million to the project, but did not reveal the identity of the other lenders.

“Sheffield Highways is the first project delivering on our pledge to provide an additional £1 billion for UK infrastructure projects,” commented Chris Heathcote, managing director and global head of project finance.

In a recent announcement, the bank said it was ready to support renewable energy, electricity generation, ports, highway development and other core infrastructure projects outlined in the UK government’s £250 billion, decade-long infrastructure plan with up to a £1 billion of additional lending.