EBRD acts as anchor investor in refinancing of R1 motorway

By Axel  Reiserer

The EBRD is participating in the refinancing of Slovakia’s R1 motorway by subscribing for €200 million in a project bond issued by Granvia a.s., the concession holder, in a private placement, managed by Deutsche Bank and Natixis. The total offering is in the amount of €1.2427 billion and used to refinance the existing senior loan for the motorway concession. The bond will expire in 2039.

Granvia is a special purpose vehicle owned by VINCI Concessions SA and Meridiam Infrastructure Slovakia S.a.r.l. The company won a 30-year concession in 2009 to design, build, finance, operate and maintain the section of the R1 Motorway between Nitra and Tekovské Nemce and the Banská Bystrica Northern Bypass in the Slovak Republic.

Now that construction of the new motorway section is completed Granvia has the opportunity to seek refinancing of the existing debt on better terms in order to reduce its cost of financing. The expected refinancing gain will also benefit the Slovak Republic through lowered availability payments. The EBRD serves as an anchor investor in the placement.

Sue Barrett, EBRD Director for Transport, said: “This is the first infrastructure project bond issue in our region and also one of the first infrastructure project bonds issued post-crisis in Europe. This bond will establish a benchmark for other PPP projects in the region. Through our participation we will support new ways of financing infrastructure investment and thus encourage other investors to diversify their sources of funding by accessing the capital markets.”

The R1 motorway is an important transport link between western and central part of the Slovak Republic and was the first project in the country to be implemented under a Public Private Partnership (PPP) scheme. The EBRD initially provided a €199.8 million loan in 2009 as part of the larger senior debt facility, which is now essentially being replaced with the participation in the bond issue.

The EBRD’s total investments in transport operations have reached €10.4 billion, with over 230 projects financed. The Bank has just approved a new transport sector strategy, which places a high priority on increasing the role of the private sector in the industry.