MegaProject 1272: Norway's first PPP project in over a decade reaches financial close
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Skanska has announced the commercial and financial close of the Rv. 3/Rv. 25 PPP project, which involves the financing, design, construction, operation and maintenance of a new 25km national road between Løten and Elverum, in the county of Hedmark, south-east Norway.
This is the first PPP project to be implemented in Norway in more than ten years and is one of the biggest road projects to ever be delivered in the country. The new road will improve access between Oslo and Trondheim, the capital and third largest cities in the country, respectively.
The Norwegian Public Roads Administration (NPRA) published a Request for Qualifications (RFQ) in April 2017, following the project's inclusion in a road PPP programme announced in December 2016. Seven responses were received. In June 2017, NPRA announced a shortlist of three teams.
Skanska's team was selected over consortia containing Acciona and Strabag, and Norwegian construction firms Veidekke and Sundt. The selection was announced in March.
Skanska is investing in the project through its Infrastructure Development subsidiary and Skanska Norway’s Pension Fund, both of which hold 50% of the shares.
The PPP contract will be worth about NOK5.5 billion (US$672.5 million) of which NOK2.6 billion (US$317.9 million) relates to the construction contract. About NOK130 million (US$15.9 million) is being financed through equity and subordinated debt.
Construction will begin in the second quarter of 2018 and is estimated to be completed in late 2020. The contract length is 20 years.