M25 PPP deal set to conclude today(3)

The M25 widening project, one of the largest PFI deals of the year, is expected to reach financial close today. A large commercial banking syndicate is in place to provide around £950 million of debt.

The £6.2 billion (€7.1 billion; $9.7 billion) PPP project to widen sections of the M25 motorway around London is on track to reach financial close today, sources close to the financing of the deal have confirmed.

A group of 16 commercial banks is set to lend a combined total of around £950m, with the European Investment Bank lending a further £185m to help the deal over the finish line.

The Connect Plus consortium, comprising Balfour Beatty, Skanska, Atkins and Egis Projects, had been named preferred bidder for the scheme in May last year, although the task of financing a deal of this scale in the current conditions has proved challenging and time-consuming. Financial close had originally been scheduled for the end of 2008.

The Highways Agency, procuring authority for the scheme, said it is “working towards financial close”, adding that it hopes to sign the deal “very soon”.

The underlying project will see the special purpose vehicle provide additional capacity and maintain the M25 over a 30-year concession period.

PwC is advising procuring authority the Highways Agency. HSBC is advising Connect Plus.