SNC Lavalin invests $36m in Indian highway project

Canadian engineering and construction firm SNC Lavalin, through its subsidiary SNC Lavalin Mauritius, has made its first investment in the roads sector in India by making an equity investment of INR1.6 billion (€25.7 million; $36 million) in Rayalseema Expressway (REL), a special purpose vehicle owned by Hyderabad-based KMC Constructions, an infrastructure company with a portfolio of 10 road concessions. 

The project involves building and operating approximately 188-kilometres of National Highway 18, connecting Cuddappah and Kurnool in the state of Andhra Pradesh in southern India. REL will build four lanes and operate the project on a build, operate and transfer basis. 

The project, which has a concession period of 30 years, has been estimated at a total cost of INR16.36 billion, a source close to the company told Infrastructure Investor. The project reached final close last Friday. 

Of the estimated INR16.36 billion, INR6.2 billion is expected to come from a government grant by the National Highways Authority of India, INR7.03 billion from debt and the remaining INR3.11 billion will come from equity investment which includes the INR1.6 billion being committed by SNC Lavalin, the source said.

SNC Lavalin is ramping up its investments in the energy and transport sectors in India. The company is looking to establish itself as a significant strategic player in roads, ports, transport and other infrastructure sectors, the source said. 

SNC Lavalin is a listed engineering and construction group and has offices across Canada and in over 35 other countries. Earlier this week, it sold its 11.1 percent stake in investment firm Trencap to Caisse de Depot et placement du Quebec, a Canadian public pension plan, for approximately $116.5 million.