Allianz, EIB back Irish bypass P3

The German insurer's asset management arm has committed €146m to the project, the first in the country to benefit from the EIB's Project Bond Credit Enhancement scheme.

Allianz Global Investors (AllianzGI) has invested €146 million on behalf of its clients into the N25 New Ross Bypass PPP Scheme project in Ireland, marking financial close for the public-private partnership (PPP; P3). 

Provision of financing will be made through a combination of €17 million of shareholder funding and €146 million of public bonds to be listed on the Frankfurt Open Exchange, according to an Allianz statement. The N25 listed bonds were privately placed with European investors via AllianzGI's infrastructure debt platform, including AllianzGI parent group Allianz and a number of third-party pension funds, the statement said.

“Financing the N25 with investment grade public bonds, the sponsors Royal BAM and Iridium in partnership with the NRA and NDFA have successfully demonstrated that Irish infrastructure projects can be structured to meet high standards required by international investors,” said AllianzGI director of infrastructure debt Adrian Jones. “As Ireland continues to recover from the recession caused by the banking crisis of 2008-10, access to the broader and deeper sources of credit and liquidity, of the international bond markets will make it easier to finance ambitious new infrastructure.” 

The European Investment Bank (EIB) announced on Tuesday that it would support project, which will be the first in Ireland to be financed using the EIB's Project Bond Credit Enhancement financial structure. 

The 14-kilometre bypass in southeastern Ireland is expected to improve connections from Cork and Waterford to the port of Rosslare, eliminating a major bottleneck from the N25 route. As part of the bypass, a new 900 metre suspension bridge will be constructed 36 metres above the Lower Barrow. 

The P3 will be developed by a consortium led by BAM Iridium including BAM Civil and Dragados Ireland, after which it will be operated and maintained for 25 years by Iridium Concesiones de Infraestructuras and BAM Civil. Development will be supervised by national roads authority Transport Infrastructure Ireland (TII). According to Irish Minister of Transport, Tourism and Sport, the project will create between 250 and 300 jobs. 

With this latest commitment, AllianzGI's infrastructure debt platform enters its 10th European Union member state and raises its total commitment to infrastructure debt to over €5 billion in just over three years. 

The N25 bypass is expected to be open to traffic in 2018.