France-based fund manager Meridiam and developer VINCI have sealed a €420 million financing package for the expansion of the A7 motorway, in Germany.
The closing of the deal comes two months after the pair were awarded the project – which will expand a 60km-long section of Germany's longest north-south transit connection – by the country’s Ministry for Transport and DigitaI Infrastructure (BMVI). This will include the construction of bridges and a further two lanes to the current four-lane stretch.
Meridam and VINCI’s investment will be funded by a €420 million debt package provided by the European Investment Bank, CaixaBank, Development Bank of Japan, DZ Dank and KfW IPEX. The facility is comprised of two long-term tranches and two shorter-term tranches and also includes €120 million from the German government.
The 30-year concession represents the third road PPP owned by VINCI and Meridiam, adding to the duo’s €510 million A5 motorway investment, closed in 2009, and the A4 project which Meridiam entered in 2015, seven years into its concession period.
Germany is set to witness a number of further road investments after the BMVI’s budget for this year was increased by 9.2 percent to €26.8 billion last November, in what the ministry described as “the largest investment budget for infrastructure that has ever existed”, with the primary focus to be on new roads and bridges.
However, the A7 development in Lower Saxony has angered the state’s Minister of Transport Olaf Lies, who described the PPP this week as “nonsensical” and said the project was a “mistake and a waste of money”.