Finance for Bratislava project

By Sandy Guthrie27 June 2016

The construction of new sections of the D4 highway and the R7 expressway in the Slovak Republic is being supported by the European Bank for Reconstruction & Development (EBRD) with debt facilities of up to €150 million.

And the European Investment Bank (EIB) has signed a €426 million financing agreement with Obchvat Nulka (Zero Bypass), a consortium comprised of Macquarie Capital, Cintra Infraestructuras Internacional and Porr. The consortium was selected by the Slovak Ministry of Transport in May for the design, construction, operation and financing of approximately 27km of the D4 motorway around the Slovakian capital, Bratislava.

The ring road D4-R7 at Bratislava is said to be one of Central Europe’s largest PPP (public-private partnership) infrastructure projects.

The EBRD funds are part of a larger package totalling €875 million provided to Zero Bypass under the PPP scheme. Other participants, apart from the EIB, include Slovak Investment Holding, Instituto de Credito Oficial (ICO in Spain), and Unicredit, CSOB, SMBC and Credit Agricole as commercial lenders.

The investment includes 27km of the D4 highway from Jarovce to Ivanka Sever and Ivanka Sever to Rača, which are parts of the Trans-European Transport Network (TEN-T) development programme.

Together with the R7 expressway, they will provide a connection between the D1 and D2 highways in the Slovak Republic. The R7 expressway, with a total length of 32km from Prievoz to Holice, will connect the D4 and D1 highways, and provide access to the city of Bratislava from the south east. It will also improve the connection between the industrial zones and urban districts of the country.

Sue Barrett, EBRD director for transport, said, “This is a very important project and the EBRD is pleased to join forces with other financiers to make it happen.

“The new road sections will play an important role in easing traffic congestion around Bratislava, open up access to other parts of the country, and connect the Slovak Republic with Trans-European Networks.”

She added, “Bringing together public and private partners, it demonstrates the benefit of PPP solutions for large infrastructure projects where each party can participate to the best of their strength.”

Investment Plan for Europe

It is the first EIB transaction in Slovakia to benefit from the support of the EU budget guarantee under the European Fund for Strategic Investments (EFSI) – the financing component of the Investment Plan for Europe (IPE).

EIB vice president László Baranyay, who is responsible for the bank’s operations in Central European countries, said, “This transaction is unique in three respects – it is by far the largest EFSI project in Central and Eastern Europe to date; it is a model for combining EFSI support with Structural & Investment Funds; and it is a bold PPP structure.”

EFSI is an initiative implemented jointly by the EIB Group – comprising the EIB and the European Investment Fund (EIF) – and the European Commission, and it is one of the three pillars of the IPE that aims to revive investment in strategic projects around Europe.

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