The Export-Import Bank of Korea (KEXIM) has disbursed the first tranche of a £102.5 million (US$154.5 million) loan to finance the remaining construction of the Mersey Gateway Bridge PPP project in the UK.
This is the first financing that KEXIM has made in UK infrastructure in collaboration with the British government's HM Treasury department.
The Mersey Gateway is a six-lane cable stayed toll bridge spanning 2.13 km over the River Mersey in the North West of England (Manchester-Liverpool). With a river span of 1 kilometre, along with a new and improved high standard road of 9.5 kilometres long and three towers rising up to 125 metres above the river bed, the bridge will stand as an iconic piece of UK infrastructure, connecting north Widnes and Merseyside with Runcorn and the national motorway network in north Cheshire.
The project is being developed under a 30-year contract to design, build, finance and operate the bridge.
The total project investment is estimated at £600 million (US$904.7 million). KEXIM is investing £102.5 million (US$154.5 million) in the project, alongside HM Treasury providing a 29-year £257 million (US$387.5 million) Mersey Gateway bond as part of UK Guarantee scheme, to finance the remaining construction period of two years.
Construction started in May 2014, and the bridge is expected to be completed and open to the public in September of 2017.
The project is being funded over this 30-year period by a mix of tolls paid by users and the grants from the UK Government. The Council will not make any payments to Merseylink until the road is open and toll revenue plus government grant is available to fund these payments.
Bilfinger Berger Global Infrastructure SICAV S.A. announced on 31 March 2014 that it completed the acquisition of 37.5% of the equity and subordinated debt interests in Merseylink from Bilfinger Project Investments Europe. Other equity partners in the Merseylink consortium are Macquarie Capital Group Limited and FCC Construcción. The joint venture was appointed as preferred bidder for the project in June 2013 and it achieved financial close on 28 March 2014.
A Korea Eximbank official remarked:
I am really pleased that KEXIM is providing debt finance for the Mersey Gateway road bridge that Samsung C&T is currently building with partners in the north west of England. I was lucky enough to visit the project earlier this year, along with then Ambassador to the UK Lim Sungnam, so I have first-hand experience of its scale and importance, and I was greatly impressed by the excellent UK-Korea collaboration. This is a further example of substantial Korean investment into the UK's infrastructure, and I look forward to welcoming much more in the months and years to come.
Mersey Gateway Project is the first large scale PPP project for a Korean EPC contractor to enter the UK market, and Korea Eximbank plans to play a decisive role to support Korean construction companies' entry in to the developed infrastructure market including UK.