The EBRD is bringing private finance to the modernisation of the transport system in the Slovak Republic with a loan for the construction of the R1 motorway, part of the east-west national corridor.
R1 is an important transport link in the south-west of the Slovak Republic and the first project in the country to be implemented under a Public Private Partnership (PPP) scheme.
The project launches the Slovak government’s PPP programme to upgrade the road network in Slovakia in order to stimulate the economy and improve regional links.
The EBRD is providing a €200 million loan to Granvia, a special purpose vehicle created to finance the construction of the R1 motorway, and owned by Vinci Concessions and Meridiam Infrastructure Fund.
Following its successful participation in the tendering process, the Slovak Ministry of Transport, Post and Telecommunications has awarded Granvia a 30-year concession to build, finance, operate and maintain four sections of R1.
The project includes construction of a total of 52 km of highway, including the sections between Nitra and Selenec, Selenec-Beladice, Beladice-Tekovske Nemce, as well as the Banska Bystrica northern bypass.
The total cost of the project is approximately €1.3 billion. The EBRD loan will cover 20 per cent of the total debt required. The rest of the debt funding will be co-financed by a group of commercial banks, which will provide €780 million.
“This project is an important step for modernisation of the Slovak transport infrastructure with the participation of the private sector. The successful closing of the transaction in the current economic downturn and liquidity crisis provides a strong market signal that well structured PPP projects remain a viable alternative for developing public infrastructure even under adverse market conditions”, said EBRD First-Vice President Varel Freeman.
“We consider the financial closing of the R1 to be a success for the Slovak Republic, as well as for all partners who took part in this transaction. Despite the current adverse conditions on the international financial markets, we have achieved a common objective that will set an example for other PPP projects in Slovakia," said Slovak Transport Minister Ľubomír Vážny.
The EBRD is a key investor in infrastructure projects from central Europe to central Asia. To date the Bank has invested over €6.5 billion in around 170 transport infrastructure projects.