The Flemish region’s landmark €1.5 billion schools public-private partnership (PPP) – which packages the design, build, financing and maintenance (DBFM) of 211 schools under a single contract – has reached financial close more than a year after it was awarded.
A consortium of Fortis Real Estate and BNP Paribas Fortis won the 30-year contract in late May 2009 but reaching financial close was complicated by the logistics of conducting due diligence on the dozen or so construction companies that have been sub-contracted to build the 211 schools.
In the end, AG Insurance (€100 million), BNP Paribas Fortis (€250 million), Dexia (€125 million), KBC (€125 million) and SMBC (€100 million) are providing a €700 million, 6.5-year construction facility with margins priced around the 300 basis points mark.
That senior debt facility will be refinanced by a 30-year, €1.5 billion long-term loan provided by BNP Paribas Fortis and guaranteed by the Flemish government. This means that in a worse-case scenario, the Flemish government would have to fund the rest of the deal from its balance sheet.
Fortis Real Estate said in a statement that it expects all schools to be completed by 2016. The majority of the schools (around 180) are greenfields. The 30-year contract will receive availability payments from the Flemish authorities – public contributions paid in exchange for making the assets available in good condition.
If you do not receive this within five minutes, please try to sign in again. If the problem persists, please email: