A consortium led by infrastructure fund DIF has reached a €1.3 billion financial close on the extension of Germany’s A6 highway.
DIF’s involvement in the PPP will be funded via its €1.1 billion Infrastructure IV vehicle, which holds a 50 percent share in the ViA6West concession company. The consortium also includes Hochtief PPP Solutions (30 percent) and Johann Bunte Bauunternehmung (20 percent).
Some €600 million of the money secured at financial close will go towards construction costs. The project is financed through a combination of medium- and long-term debt facilities provided by the European Investment Bank, DZ Bank, KfW, Landeskreditbank Baden-Württemberg and Mitsubishi UFJ. KfW said its tranche came in the form of a project bond.
“This instrument allows making optimal use of private investor liquidity while also involving the SME sector in order to upgrade and expand public infrastructure,” said Christian Murach, member of the board at KfW Ipex-Bank. “In Germany, [the PPP framework] has been used only sporadically up until now, whereas in a number of other countries it is already a frequent and successful financing option with a proven track record for large-scale public infrastructure projects.”
The group, which was awarded the project in October, will begin work at the start of next year to build six lanes of new highway stretching 25km and revamp the 1.3km Neckartal bridge. They will also operate the 47km stretch of the A6 highway. Completion of the project is expected in 2022.