The European Investment Bank (EIB) is lending nearly EUR 90 million for the construction and servicing of the A4 motorway in the Land of Thüringen. The project is part of the Trans European Transport Network (TEN-T) and represents the first PPP project directly financed by the Bank in Germany. The new motorway will contribute to a better transport connection along the main East-West motorway axis in Central Germany providing a link from Benelux and France to Poland and beyond.
The EIB funds will be used for the construction of a new 22.5km 2x3 lane section of the A4 motorway around Eisenach, known as the Hörselberge bypass, as well as the extension of an existing 2 km 2x2 lane section to 2x3 lanes. The loan finances also the construction of 3 viaducts and the removal of a 10 km part of the existing old motorway.
The project will be implemented under the innovative public-private partnership (PPP) financing scheme for the design, construction, finance and operation and is part of the first group of four motorway projects selected by the German authorities under the so called A-Model Scheme to be ultimately financed from revenues generated from the toll road system for heavy trucks introduced in 2005. The 30 year Concession will comprise the operation and maintenance of a 44.7 km section of the A4 Autobahn including the new construction.
A concession company (Via Solutions Thuringen) owned by Hochtief PPP Solutions and Vinci Concessions will be the borrower and operator. A private sector consortium led by Hochtief and Vinci and other partners was selected following an international tender to build, finance and operate this new highway. Freistaat Thüringen represented by Deutsche Einheit Fernstrassenplanungs- und –bau GmbH („DEGES“), Berlin, will be the project promoter and the final beneficiary of the EIB loan.
EIB Vice-President Matthias Kollatz-Ahnen commented: “I very much welcome the A4 motorway project that provides the EIB with the opportunity to co-finance - for the first time in Germany - a PPP project as a direct lending operation with the private sector utilising the EIB Structured Finance Facility. I strongly believe that, as in other countries, the PPP financing will contribute to providing better and more cost effective services, delivered in time, for the benefit of citizens concerned. The EIB loan to the A-4 project contributes to the objective of Minister of Finance Steinbrück to achieve a share of 15% of public investment with PPP structuring.”
Background:
Priority objective of the EIB, the European Union’s financing institution, is to contribute to the integration, balanced development and economic and social cohesion of the Member States. Within the recent years, the EIB won a substantial experience in the area of PPP project financing in various countries providing loans exceeding EUR 20 billion in this regard.
This A4 Motorway PPP is being implemented in the framework of the EIB’s Structured Finance Facility (“SFF”). The SFF is used to support priority projects, particularly related to the Lisbon Agenda, including Trans-European Transport networks and social infrastructure, which are related to a higher risk than the Bank’s traditional risk profile.
Within the last five years (2002-2006) the EIB provided loans in Germany amounting to EUR 34 billion. Approximately one third of this amount (or EUR 11.6 billion), were loans for the country’s transport sector. Major other transport road projects supported by EIB in Germany recently are: Motorway Link A 281 Bremen, rehabilitation of the local transport infrastructure in Sachsen-Anhalt, Thüringen, Schleswig-Holstein.