DIF closes €40m French water project

The Dutch fund manager’s third fund is teaming up with Veolia on a water transaction for the second time.

DIF, the Amsterdam-based fund manager, has reached financial close on a wastewater concession project worth around €40 million.

The project includes the operation and maintenance of an existing 10.1-kilometre underground pipe which collects waste water and serves seven municipalities within the Toulon urban area in southern France. It also includes the refurbishment of a 6.4-kilometre section of the pipe.

The deal comprises a 20-year concession agreement which gives the project the right to collect a fixed payment per cubic meter of water used at each individual meter.

DIF’s third fund, DIF Infrastructure III – which closed on its raised hard cap of €800 million in April 2013 – has an 85 percent stake in the project with SADE CGTH, a subsidiary of French utility and water services company Veolia, holding 15 percent.

The deal represents DIF and Veolia’s second partnership in the water sector following the Delfluent water treatment public-private partnership in the Netherlands. DIF increased its stake in Delfluent from 8.0 percent to 32.5 percent in January 2013.

SADE CGTH will conduct refurbishment work on the Toulon project while another Veolia subsidiary, Compagnie des Eaux et de l’Ozone, will operate and maintain the asset. The project is expected to complete in January 2018.

Long-term debt financing for the deal has been arranged by Credit Industriel et Commercial and Societe Generale.