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 10/28/2015 Financial closing Lima Metro Line 2 (Peru)

Iridium reaches financial close on the Lima Metro Line 2 Project up to US$1.96 bn. It is the largest project financing in Peru history.

The financing consists of two tranches: i) a bond issue worth US$1.155 billion placed publicly with a group of institutional investors, and ii) a bank finance tranche worth US$800 million guaranteed by SACE (Servizi Assicurativi del Commercio Estero), the Italian export credit agency.

The resources obtained are to finance the construction of the 35 km of metro between Ate and El Callao and the branch between Avenida Faucett and Avenida Gambetta.

The Peruvian government, through its transport and communications ministry, made a 35-year award to the Lima Metro Line 2 Concession Company of the project for the design, construction, financing, operation and maintenance of the 25 km of Lima Metro Line 2 between Ate and El Callao and the branch between Avenida Faucett and Avenida Gambetta in the Lima-Callao basic metro network. Line 2 is to cross the Peruvian capital from east to west, linking the district of Ate with El Callao in 45 minutes. Moreover the Avenida Faucett–Avenida Gambetta branch will connect Line 2 with LimaÂ’s Jorge Chávez International Airport. The project involves the construction of a total of 35 km of tunnel and 25 passenger stations, and includes the electromechanical equipment, railway systems and electricity supply required for the metroÂ’s operation. When they start up, the metro lines are expected to carry more than 200 million passengers a year.

Following the successful bond issue on the international market last June worth US$1.155 billion and the financial closure of a syndicated bank credit worth US$800 million and guaranteed by SACE (the Italian export credit agency), on 27 October, the Lima Metro Line 2 Concession Company succeeded in structuring and closing private finance for a total amount of US$1.955 billion, as required to finance the portion of the project not co-funded by the Peruvian government. The Concession Company consists of Iridium (ACS Group), as strategic partner, three Italian firms (Salini Impregilo, Ansaldo Breda and Ansaldo STS), the Peruvian firm Cosapi and the Spanish company Vialia (FCC Group).

This financial closure, representing the biggest finance package for an infrastructure project in the history of Peru, will guarantee the availability of sufficient funds to keep the works going until the end of the project. The amount financed represents 30% of the projectÂ’s total value, while the remaining 70% of the investment is directly co-funded by the Peruvian government.

Iridium Concesiones de Infraestructuras, is the ACS Group company responsible for development, financing, investment, operation, management, servicing and maintenance in all types of government concession both for transport infrastructure and other public works.

Iridium has built up experience and expertise over more than 15 years in the implementation of Public Private Partnerships (P3) in the Americas. This experience includes the execution of more than 15 projects in Chile, Colombia, Argentina, Mexico and Ecuador since the 90s and the 2000s with an investment of more than US$10 billion, along with the performance of more than 10 P3 projects in North America with an investment value of over US$15 billion in the past 8 years.

Since early 2014 Iridium has stepped up its activities in Latin America, obtaining the award of four P3 contracts with investments worth more than US$7 billion. Line 2 of Lima Metro is the largest project and the biggest investment that Iridium has financed in Latin America. IridiumÂ’s current projects in Latin America include Lima Metro Line 2 in Peru (representing a total investment of more than US$5 billion), the Pacifico-1 and Mulaló–Loboguerrero highway in Colombia (with a joint investment of more than US$2 billion), and Ruta 5, Montt–Pargua and Paso de los Libertadores in Chile (with an investment of more than US$250 million).

Dragados SA, the ACS GroupÂ’s flagship construction firm, is the ACS Group company leading the consortium for the construction of Line 2 of Lima Metro. Iridium develops P3 projects in partnership with Dragados, covering the whole value chain of the concession business, from the design and construction of the project to its financing, commissioning and operation. Thus Iridium and Dragados have jointly carried out various major and technically complex P3 projects over the last 40 years.


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