Deals

Dai-ichi Life expands overseas project finance portfolio

The Japanese insurer has committed a total of $80m to two overseas projects – the UK’s High Speed 1 and Australia’s Victorian Desalination Project PPP.

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Dai-ichi Life Insurance revealed two recent financings for overseas projects in the UK and Australia, as it expands its overseas project finance portfolio.

Dai-ichi Life, one of the biggest insurance companies in Japan, has invested approximately ¥4.5 billion ($40 million; €33.7 million) in the UK’s High Speed 1, through participation in a tender for acquisition finance.

High Speed 1 is a concession to run the UK’s only operational high-speed rail service, which a consortium formed of funds managed by InfraRed Capital, Equitix and Korea’s National Pension Service agreed to acquire in July in a $1.2 billion deal.

The company provided senior debt financing subordinated to High Speed 1’s debt in its maiden participation in a tender for acquisition finance. “We leveraged our accumulated know-how in project finance and careful risk assessment was conducted in co-ordination between the execution and credit departments,” said Dai-ichi Life, adding that these factors “enable it to gain relatively high investment return”.

The Japanese insurer also invested approximately ¥4.4 billion in its first scheme in Australia – the Victorian Desalination Project, which is among the largest of its kind in the world. Delivered under a PPP model, the facility was commissioned in December 2012 to ensure water supply security and supply one-third of the state’s annual water consumption under a contract ending in September 2039.

Its investment is part of a total A$766 million ($585 million; €494 million) refinancing package, to which peer Nippon Life Insurance committed A$176 million earlier this October. UniSuper, Suez Environment and Itochu Corporation are the sponsors in the seawater desalination project, while AMP Capital also holds a minority stake of 5.2 percent.

Dai-ichi Life noted the investment aims to further pursue the geographic diversification of the company’s portfolio. It began engaging in project finance in Japan and overseas markets in 2013 and by year-end 2016, its investment in infrastructure and project finance exceeded ¥100 billion across nine deals.