Business, Construction, Cooperation, Financial Services, Funds, Good for Business, Lithuania, Transport

International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 13:23

A14 Vilnius–Utena highway approved for EIB financing

BC, Vilnius, 27.09.2016.Print version
A Public Private Partnership (PPP) project to reconstruct the A14 Vilnius-Utena highway has received approval from the European Investment Bank (EIB) and is set to receive financing from the European Fund for Strategic Investments (EFSI). The total sum of the loan is to be capped at EUR 40 million and will have a 12 year term, Invest Lithuania informs BC.

The A14 highway is the first PPP project in Lithuania to be financed by the EIB, allowing the project to benefit from the EIB’s experience in PPP financing. This will ensure that the project has the most robust structure possible, as well as providing for the utilization of more efficient procurement procedures. The EIB estimates the project cost, including contingencies, to be in the region of EUR 90.9 million, of which up to 44 percent will be financed by the EIB and backed by EFSI's EU budget guarantee. The remaining financing will be provided by a combination of shareholders’ funds (both equity and subordinated debt) and senior credit facilities.

 

According to Mr. Tadas Jagminas, Director of the Project Management Department at Invest Lithuania, the EIB’s involvement will bring benefits to both the public and private sectors. “The EIB has a practice of performing an extensive due diligence process whenever it is considering whether to provide project funding. Thus, the recently announced decision to approve A14 highway funding indicates that the project has been properly structured. More importantly, the EIB’s capacity to lend with competitive interest rates brings more financing options to potential bidders, as well as considerably improving the affordability of the project for the public sector.”

 

The highway Vilnius-Utena was initially constructed several decades ago. Over the last ten years traffic has nearly doubled, causing the existing concrete road to become uneven, and therefore both difficult and unsafe to drive on. As a result, there is strong political will to implement this project, which was then bolstered by an approval in Parliament in December, 2015. The tender documentation is currently being finalized and it is expected that the tender will be launched at the beginning of next year.

 

The project’s scope encompasses the design and reconstruction of individual poor-quality sections of the Vilnius-Utena highway totaling 58.1 kilometers. Additionally, following completion of the reconstruction work, regular maintenance of up to 72.1 highway section is due to be carried out. The project’s intention is to guarantee the durability and availability of the Vilnius-Utena highway infrastructure for the full 13 year term of the project and beyond. With reference to the parliamentary approval, the overall project, in terms of future availability based payments, has a total budget of EUR 169 M (VAT incl.).






Search site