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The Netflow consortium, comprising Cintra and Plenary, has achieved financial close on the A$1,800 million (US$1,38 million) Western Roads Upgrade project, Victoria’s largest single investment in arterial roads to date.
The project comprises eight high-priority road upgrades, which includes road widenings, intersection upgrades and more than 260 kilometres of road rehabilitation and maintenance across western Melbourne. This project will help to support the rapid population growth in western Melbourne and increase capacity on the network. It will also create jobs for local workers and invest heavily in the local supply chain.
As we reported in early November, Cintra, and its partner Plenary, will be responsible for the development of the project. The concession term will be 20-year period from the end of construction work completion, expected by 2021. WBHO Infrastructure will be in charge of the construction works that comprise the project. In addition, Ferrovial’s subsidiaries Amey and Broadspectrum will be responsible for the maintenance of the network. This is the first road maintenance contract awarded to Broadspectrum since its acquisition by Ferrovial in May 2016.
In another first the finance package involves the first greenfield bond financing in Australia since the Global Financial Crisis. It is made up of 60 per cent senior secured notes provided through US Private Placement and 40 per cent via bank lenders. Bank debt is being provided by leading domestic and international banks Westpac, Bank of China, ICBC and Mizuho. Equity financing comes from Netflow joint venture partners and project sponsors Cintra (50%) and Plenary (50%), which is in line with Netflow’s goal of investing in, developing and managing major road concession projects.
The project is the second investment of Cintra in Australia since the Toowoomba Second Range Crossing awarded in 2015. In addition, the Western Roads Upgrade becomes the first project awarded since the creation of the Netflow joint venture between Cintra and Plenary to develop road projects in Australia and New Zealand. Ferrovial also has a presence in the country through Broadspectrum and Amey, in services, and Ferrovial Agroman, in construction.