3i Infrastructure plc it has committed to invest €11.7 million (US$14.65 million) to acquire an 80% holding in the La Santé Prison primary public private partnership (PPP) project in Paris, France.
The La Santé primary PPP project includes the design, build, refurbishment, finance and maintenance of various buildings for La Santé, the Paris prison. The Prison will have 800 cells and new facilities for the reception of families. The project will also include the provision of facilities management services once construction is complete, which is expected to be by the end of 2018.
The project was procured under a typical PPP framework by the Agence Publique pour l'immobilier de la Justice (APIJ), part of the Ministry of Justice, and is part of a wider government initiative to modernise French prisons.
As part of the contractual arrangements for its commitment to invest in the project, 3i Infrastructure has entered into an agreement with a subsidiary of 3i Group plc, BAM General Partner Limited. Under the purchase agreement BAM GP, the entity which originally qualified to participate in the project, has agreed to transfer to 3i Infrastructure its 80% shareholding in the project company. The consideration for such transfer amounts to €32,000.
In addition, financial support for the commitment to invest in the project has been provided by 3i Infrastructure pursuant to a €11.65 million (US$14.6 million) letter of credit issued by 3i Infrastructure's lenders under the company's revolving credit facility in favour of the lenders to the project.
The total project investment is estimated at €250 million (US$313 million).
Peter Sedgwick, Chairman, 3i Infrastructure plc, commented:
"The Board is pleased with the investment in La Santé, which represents a further step in building the company's exposure to primary PPP projects, alongside its focus on investing in Core infrastructure."
Ben Loomes and Phil White, Managing Partners and Co-heads, Infrastructure, 3i Infrastructure plc, added:
"We are pleased to reach financial close of the La Santé primary PPP project. We are seeing a healthy pipeline of investment opportunities in European primary PPP projects."
La Santé Prison is a prison operated by the Ministry of Justice located in the east of the Montparnasse district. It is one of the most popular prisons in France, with both VIP and high security wings. La Santé is one of the three main prisons of the Paris area.