Meridiam closes France’s last HSR project

The French fund manager is the largest shareholder in the consortium that has just closed the €2.28bn Nimes-Montpellier high-speed rail line – the last PPP in France’s ambitious high-speed rail programme – backed by a club of 13 banks.

A milestone was reached yesterday, when the financial close for the €2.28 billion Nimes-Montpellier high-speed rail (HSR) line put an end to France’s €13 billion-plus HSR  public-private partnership (PPP) programme.

A consortium led by fund manager Meridiam Infrastructure (53 percent) and also including FIDEPPP (27 percent), Bouygues (14.8 percent), Spie Batignolles (2.8 percent) and Alstom Transport (2.4 percent) put pen to paper with a club of 13 banks to help fund the project – which has a €1.5 billion PPP component, in addition to other works financed exclusively by the state.

On the debt side, 11 commercial banks – BBVA, BayernLB, Bank of Tokyo Mitsubishi, DZ Bank, KfW, HSBC, Mizuho, Natixis, SMBC, Societe Generale and Unicredit – together with the European Investment Bank (EIB) and state-backed Caisse des Depots et Consignations (CDC) are providing some €1.19 billion of debt for the project.

Facilities include a circa €828 million, five-and-a-half year construction loan; a €117 million equity bridge loan of just over five years; a six-year, close to €19 million revolving VAT facility; and a €224 million, 23-year loan. The EIB – underwriting €307 million – and CDC – providing €507 million – will “handle long-term refinancing operations,” the sponsors said in a statement, taking out the construction loan. Both banks are benefiting from a guarantee from rail agency RFF, backing the operations period.

The 25-year PPP will not expose the private sector to traffic risk and will instead use an availability payment structure, where the sponsor will receive regular contributions from the public sector in exchange for making the asset available in good condition.

The Nimes-Montpellier project will involve the construction of 80 kilometres of new rail lines, including 60 kilometres of high-speed rail line between the two cities. The new line is expected to cut travel times between Paris and Montpellier to less than three hours, once it opens in 2017.

For Meridiam – which recently closed its second European infrastructure fund on €935 million and is working towards wrapping-up its second North American fundraise on $1 billion this summer – Nimes-Montpellier is its second French high-speed rail PPP. The fund manager was also part of the consortium that won the €7.8 billion Tours-Bordeaux link.

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