EIB and international consortium finance construction of a section of the A7 motorway in Germany
- Release date: 11 April 2017
- Reference: 2017-103-EN
An international consortium consisting of the European Investment Bank (EIB), KfW IPEX-Bank, DZ BANK AG, DBJ (Development Bank of Japan), and CaixaBank is financing the expansion of the A7 motorway between Bockenem and Göttingen, Germany. As a part of the 59.60 km project, 29.2 km of road will be expanded from four to six lanes and two major bridges crossing the A7 will be repaired. The project is expected to eliminate a bottleneck in transport infrastructure in the southern part of Lower Saxony and will contribute to strengthening trans-European networks (TEN-T), which are intended to improve cross-border connections within the EU by 2030. In addition, to the construction works, the project includes management and maintenance of the entire section of the motorway.
Following an open international tender by the German Federal Government, the rights to implement this public private partnership (PPP) project were awarded to a private sector consortium consisting of the globally renowned infrastructure investors VINCI and Meridiam.
The project will form part of the A-model PPP programme, under which the Federal Government will make payments to the private contractor based on the availability of the road.
A total of EUR 420 million will be provided by loans from the participating banks.
By providing this financing, in which KfW IPEX-Bank acts as the facility and security agent and DZ BANK as the account bank, the Funders emphasise their commitment to structured finance for infrastructure projects undertaken by the private sector. "We are very pleased to be collaborating with our respected and experienced business partners VINCI and Meridiam on another major German PPP," commented Andreas Ufer, Member of the Management Board of KfW IPEX-Bank, on the project. "This instrument allows making optimal use of private investor liquidity while also involving the SME sector in order to upgrade and expand public infrastructure."
Construction is due to start in May 2017 and is expected to last 3.5 years. The project period for this PPP is 30 years.
An information graph illustrating how PPPs work is available for download on the KfW IPEX website.