Financial close for Krakow student accommodation project

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Financial close for Krakow student accommodation project

As part of the implementation of the Polish Investments Program, Polskie Inwestycje Rozwojowe (PIR), has agreed to invest in the PPP contract with the Jagiellonian University in Krakow (Poland) for the modernization and maintenance of three students houses with sport facilities.

The hostels were built in the 1970s and no are longer able to meet increasing technical and sanitation standards. Three student hostels and their sports and recreation infrastructure will be completely refurbished, fitted with modern conveniences and maintained for twenty-five years under a PPP agreement.

The project will be developed by a special purpose vehicle, whose partners will include, in addition to PIR: BYPolska Property Development S.A. (Bouygues group) and Cofely Services sp. z o.o. (GdF Suez group).

Acting through Karmar S.A., the Bouygues group will be responsible for construction work, while the GdF Suez group, acting through Cofely Services Sp. z o.o., will take over maintenance and ongoing repairs of infrastructure.

The total project investment is estimated at PLN80 million (US$23.7 million). Bank Pekao S.A. will provide debt financing for the project in the form of a long-term investment loan. The loan was granted for 23 years, and will mature at the end of 2037.

Collegium Medicum of the Jagiellonian University will be required to make monthly payments for availability, and accommodation and pricing policy for students. The total value of the project is estimated at approximately PLN 100 million (US$29.7 million).

The first hostel is expected to be ready at the beginning of the 2015/2016 academic year, while the other two are expected to be completed in 2016.

This is the first PPP project in Poland involving a public university and also the first such venture in the public building sector. It was signed on October 14 with the Polish Minister of Science and Higher Education.

Broadway Maylan is responsible for the architectural design and Allen & Overy acted as a legal advisor for the transaction.

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