Massive Aussie water PPP awarded(3)

Financing has been arranged for a A$3.5bn desalination plant PPP in Australia. Debt was provided by a 12-strong banking syndicate for the project to design, build, finance, operate and maintain the plant at Wonthaggi over a 27-year concession period.

Financial close has been reached on the A$3.5 billion (€2.05 billion; $2.9 billion) Victorian Desalination PPP in Australia.

Procuring authority the state of Victoria has entered into an agreement with the AquaSure consortium, comprising French water company Suez Environment through its Degremont subsidiary, Australian construction firm Thiess, and infrastructure advisor Macquarie Capital Group, to develop the facilities.

The losing bidder, comprising Veolia Water, RBS Australia and John Holland, has been reported in the Australian press to be pursuing compensation of up to A$10 million to cover its bidding costs.

The deal is one of
the biggest PPPs
so far this year

The project will see AquaSure design, build, finance, operate and maintain one of the largest reverse-osmosis plants in the world, located near Wonthaggi, over a 27-year concession period. The plant, which should be operational by late 2011, will provide up to 150 billion litres of water a year, equivalent to a third of Melbourne’s water supply.

The transaction is the world’s largest ever PPP scheme in the desalination sector and is one of the biggest deals in any sector to get financed this year.

Debt financing for the deal was provided by a 12-strong bank syndicate led by Australian institutions National Australia Bank and Westpac Banking Corporation. Other banks involved in the financing were Intesa Sanpaolo, Banco Bilbao Vizcaya Argentaria, Banco Santander, HSBC, SMBC,  Bank of Tokyo-Mitsubishi UFJ, Dexia Credit Local, Industrial and Commercial Bank of China, Macquarie Bank and Mizuho Corporate Bank.

Consortium members Suez, Thiess and Macquarie Capital are all to invest equity in the project. Other equity investors in the scheme include superannuation fund UniSuper, HSBC Environmental Infrastructure Fund, Itochu Corporation, and a Korean investment consortium comprising Samsung C&T corporation, Korean Development Bank, Korea Life Insurance and Korean Teachers Credit Union.