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Red Compartida telecoms PPP reaches financial close

The $7bn public-private partnership attracted $2.3bn in funding from a group of local and international funders.

The consortium developing the $7 billion Red Compartida telecom public-private partnership in Mexico has reached financial close with the backing of local and international financiers.

Altán Redes, the consortium developing the project, received over $2.3 billion to fund plans to build a telecom network available to 92.2 percent of the Mexican population.

International investors and finance institutions have agreed to provide $765 million. Two companies providing the technology for the project, Huawei and Nokia, have committed 37 percent of the funding. Mexican development banks Banopras, Nafin and Bancomext are providing $690 million of financing over 13 years.

Altán Redes, which was announced the winner over the PPP auction in December after its only rival was disqualified the week before, is financed by a group of players, with the largest stakeholder being a fund managed by Morgan Stanley Infrastructure, owning 33.18 percent. The China-Mexico Fund made its second investment since launching in 2014 to take the second largest stake. CDPQ, through a joint venture with CKD-IM, purchased a 12.68 percent stake. Local telecom companies Axtel and Megacable each took a 4.01 percent stake.

“This has been a very demanding and transparent tender process, in which Altán provided that it had the most solid and trustworthy bid, surpassing all the minimum requirements by a wide margin,” Altán Consortium representative Eugenio Galdón said in December. “Red Compartida will soon be a reality that will positively impact the daily lives of Mexicans.”

Construction is expected to begin on 31 March 2018. The contract is a 20-year concession with an option to extend it for an additional 20 years.