TIIC infra fund buys stake in Polish A1 PPP

The Portuguese infrastructure fund has formed a joint-venture with Polish company NDI to hold a 25% stake in the concessionaire that is building and maintaining the northern section of Poland’s A1 highway.

The Transport Infrastructure Investment Company (TIIC), a Portuguese infrastructure fund, has acquired a stake in the northern stretch of Poland’s A1 highway – being built via a public-private partnership.

The investment is TIIC’s fourth and is being made through a joint-venture with Polish construction company NDI. NDI owned a 25.31 percent stake in the GTC consortium, which is building and operating the northern stretch of Poland’s A1. It has now formed a joint-venture with TIIC – called NDIA – which sees the Portuguese fund became an equal partner in holding the 25 percent stake.

Skanska, John Laing and Intertoll are the other shareholders in the GTC consortium.

The northern section of Poland’s A1 highway is a 35-year concession that includes the design, build, financing, operation and maintenance of 152 kilometres of road linking Gdansk to Torun. The project is divided into two sections – an 85.9 kilometre stretch from Gdansk to Nowe Marzy, awarded in 1997 and already in operation – and a 62.4 kilometre portion from Nowe Marzy to Torun, awarded last year and set to be up and running in late 2011.

TIIC’s latest purchase is its first outside of the Iberian Peninsula and takes its total investments up to €80 million. It also owns minority stakes in two Portuguese road concessions and a minority stake in the new company resulting from the buyout of Cintra’s car parks division by Portuguese parking firm Emparque.

The fund originally intended to raise €500 million but chief executive Manuel Cary said that target has been revised to €200 million in light of difficult market conditions. He expects to reach final close soon.  TIIC invests in a mixture of greenfield and brownfield projects and targets returns of between 10 percent and 14 percent. Its lifecycle is set at ten years and it expects to hold assets for an average of seven years.

TIIC reached its first close in May 2008 at €137.5 million with 60 percent of that amount coming from its core sponsors – Portuguese toll road operator Brisa, Millennium Investment Bank and Compagnie Benjamin de Rothschild. The fund’s other investors are institutional investors including pensions, life insurers and banks.