Jamaican toll road in $285m refinancing

The European Investment Bank, the International Finance Corporation and the Inter-American Development Bank have agreed to re-finance a Jamaican highway project developed by Bouygues and VINCI.

International development institutions have stepped in to offer $198.5 million in debt for the $285 million refinancing of a Jamaican toll road operated by French infrastructure developers VINCI and Bouygues.

French development finance agency Proparco committed 19 percent ($37.5 million) of the $198.5 million limited recourse, 18-year loan, while the Inter-American Development Bank, the International Finance Corporation (IFC) and the European Investment Bank each provided 27 percent ($53.6 million), according to the IFC.

The remainder of the $285 million financing came from $7 million in equity provided by IFC and Proparco, a $13.5 million contribution from the Jamaican government and $66 million of cash from the ongoing operations of the portion of the planned 230 kilometre toll road network that is already open to traffic, according to Astris Finance, an advisor to the toll road operator.

Astris said the new loan will enable the operator to refinance a bond used to support the first 33 kilometre section of the toll road, which opened to traffic in 2003. It will also help finance the next 10.5 kilometre phase of the toll road, which will bring its total operational length to 56 kilometres.

The toll road operator, Transjamaican Highway, won a 35-year concession in 2001 to design and operate a toll road connecting Jamaica’s capital city, Kingston, to the centre of the country, according to the IFC. VINCI subsidiary Autoroutes du Sud has a 34 percent stake in Transjamaican Highway, while Bouygues Travaux Publics has a 66 percent stake, according to the IFC.

Astris said in a statement that the financial crisis and restructuring of Jamaica’s sovereign debt in 2009 presented a considerable obstacle to the recent refinancing of the project. Astris said “most traditional resources of funding were severely restricted or virtually shut off”. As a result, the financing package closed for the road allowed the project to be refinanced “at unparalleled conditions”, Astris said.