Meridiam seals close on €250m Finnish road

The last section of the E18 will be built thanks to financing from the EIB, the Nordic Investment Bank and Pohjola Bank.

Meridiam Infrastructure (Meridiam) today announced that it had reached financial close on a public-private partnership (PPP) project to design, build, finance and maintain the Hamina-Vaalimaa section of the E18 motorway in Finland.

The Paris-based fund manager, in consortium with local developer YIT, was named preferred bidder for the project in March 2015. Construction is expected to start this summer, after which the road will progressively open to traffic. Full completion of the construction phase is slated for end 2018.

The stretch to be built is the last section of the E18 motorway, which crosses Finland from Turku to the border with Russia. The total investment of €250 million required for the project will be financed by the European Investment Bank (EIB), regional lender Nordic Investment Bank and Helsinki-based Pohjola Bank.

The equity will be provided by Meridiam and YIT, which will own respective stakes in the project of 80 percent and 20 percent.

The deal is the latest in a series of road PPPs in Finland, some of them linked to the E18 motorway as well as to the main road 4 and the Jarvenpaa-Lahti motorway. It is also Meridiam’s second investment in the country, after the fund manager backed the Koskenkylä-Kotka stretch of the E18 in 2011.

This first project, in which the firm invested alongside Finnish pension Ilmarinen, local developer Destia and YIT, was valued at €650 million when awarded in November that year. The related 53-kilometre motorway section was opened last October.