The world this month – April 2009

A summary of infrastructure news from around the world

Ontario unveils C$32.5bn infrastructure spending plan
The Canadian province said it will use both public and private funds to improve its roads, schools and public transport over the next two years. Around C$9 billion will go to transport, C$7 billion to healthcare and C$4 billion to education.

EU fast tracks Babcock & Brown Europort sale
Babcock & Brown Infrastructure received EU clearance to sell a management stake in port operator Europort. The listed infrastructure fund agreed to sell a 29.7 percent stake in the company in late December for around €155 million.

Singapore plans infrastructure push
The island-state said it would invest between S$15bn and S$17bn in infrastructure projects in both 2010 and 2011. Government sources said the investment is aimed at strengthening its position as a business hub.

Interest rates double for Dutch Gas expansion loan
Tight credit markets forced Dutch Liquefied Natural Gas, a gas pipe expansion project in Maasvlakte, to borrow from the European Investment Bank and a commercial banking syndicate at double the interest rates paid on its original €243 million loan a year ago.

IDFC Project Equity invests $70m in Indian power company
The Indian infrastructure fund injected Rp3.5 billion ($70 million; €51 million) into power plant operator Essar Power to fund the operator’s expansion plan. The investment was made from a dedicated India Infra Fund that IDFC manages.

McKinsey warns of $190bn Indian infrastructure shortfall
The management consultants found that the credit crunch and slowing foreign investment has blown a $190 billion hole in India’s planned $500 billion infrastructure spend in 2007-12. They called on private investors, including pension funds, to step in to fill the gap.

VinaCapital invests in Vietnamese wind farm
The Vietnam-based firm took a 25 percent stake in the Thuan Binh Wind Farm Company – a project backed by the Vietnamese government. The wind farm requires approximately $60 million for the first phase of its development, which is 30 megawatts of installed capacity.

BAA ordered to sell three airports
The UK Competition Commission issued its final report on BAA’s ownership demanding that it sell three of its seven airports in England and Scotland. BAA has not said whether it will carry out the Commission’s demands.

Moody’s warns of refinancing risks in Australian PPPs
A report published by the ratings agency found that one-third of Australian social infrastructure PPPs are open to refinancing risk in the medium term. The report also concluded that the country’s pipeline for PPPs remains robust.

RBS launches PPP department
The Scottish bank appointed Vivek Sapra to head up the new department. Market sources say he will rejig the bank’s approach to providing long-term financing for PPPs following its announcement last month that it would no longer offer project finance loans.

USS to replace chief investment officer
Peter Moon will retire next year from the UK’s University Superannuation Scheme, an influential limited partner in private equity, infrastructure and real estate funds.

TIFIA to stop lending on first-come, first-serve basis
Mark Sullivan, the director of the US credit assistance programme for infrastructure, said at a conference in Washington DC last month that TIFIA will award financing to projects based on a competitive, fixed-date solicitation process.

Meridiam among three bidders for Montréal symphony
The French infrastructure fund replaced Babcock & Brown Canada as equity sponsor in the Accès Symphonique Montréal consortium. Two other consortia are bidding for the 30-year concession to develop and operate the future home of the Montréal Symphony Orchestra.

Alberta launches Calgary ring road PPP
The fourth PPP road project in the Canadian province would bring the road encircling its largest city 25 kilometres closer to completion. A final southwest portion of the road should be completed by 2015.

HgCapital invests €300m in Spanish solar energy
UK-based private equity firm HgCapital invested an aggregated €300 million into three solar energy plants in southern Spain. The investment is also its first deal in Spain.

European Investment Bank lends €500m to trans-Europe rail link
The European Investment Bank lent €500 million to help fund the 370 kilometre high speed rail network between Valencia and Madrid. It is the first installment of a €1.3 billion loan agreed last week at the bank’s annual forum in Barcelona.

Asciano mulls takeover, break-up proposals
The Australian port and railroad operator said it is considering various proposals that could lead to asset sales or a change of control. Concerns over leverage have reduced its market value to A$500 million ($349m; €258m).

Michael Sabia takes over at Caisse de Dépôt
Michael Sabia, the ex-chief executive of BCE who worked on the failed take-private of the Canada telecoms company, was appointed president of the C$120bn Caisse de Dépôt et placement du Québec, a prominent investor in infrastructure assets.

Carlyle raises $500m MENA fund
The global buyout firm has closed its first MENA-focused fund with half of the commitments it had originally targeted. Among other sectors, the fund will invest in energy and infrastructure.

Macquarie, South Korean bank to raise $1bn fund
The global infrastructure heavyweight will raise $300 million while Woori bank will invest $200 million in the fund, which will focus on South Korea’s infrastructure and renewable energy sectors.

Alterna holds first close toward $1bn fund
The Connecticut-based is reportedly $229 million toward the $1 billion target for its debut infrastructure fund. The fund will focus on core capital assets related to the transportation, industrial and energy sectors.

PFI gets top rating from 96% of managers
Research published by the quango Partnerships UK found that 96% of contract managers were bullish on the overall performance of PFIs in 2008.

LaHood dismisses gas tax increase
The US Secretary of Transportation said in an interview with the Wall Street Journal that a 10 cent increase in the gasoline tax is ‘not going to fly anywhere in America’.

Commission recommends ‘fundamental shift’ in US transportation financing
The federally-mandated National Surface Transportation Infrastructure Financing Commission suggested that the US move from a vehicle fuel tax to a vehicle miles traveled tax to shore up federal highway transportation funds.

Macquarie seeks distance from listed specialist funds
The firm said it will not buy further shares in its specialist listed funds. The announcement came as Macquarie shares hit a 10-year low amid speculation that it would have to raise capital.

British Columbia drops Port Mann concession
The Canadian province will procure the toll bridge as a design-build contract after it failed to reach agreement with a Macquarie-led consortium on debt terms for a C$3.3bn concession.

Alinda joins $1bn Louisiana pipeline joint venture
The New York-based infrastructure fund manager will pay $526.5m in cash for a 50 percent stake in the Haynesville Expansion joint venture, which is sponsored by midstream energy partnership Regency Energy Partners.

Infrastructure India to internalise management in £2m deal
The UK-listed infrastructure fund became the latest externally-managed fund to propose bringing its management team in-house. The Bloomsbury Asset Management Advisors-managed fund raised £36.7 million on the London Stock Exchange last year.

Holland’s DIF buys two UK PFI accommodation deals
The Dutch infrastructure fund manager acquired an army housing project in Portsmouth and half of a university accommodation development in Hertfordshire. It was the debut investment for its DIF II Fund, which held a first close on €200 million in November 2008.