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[Exclusive] Korean investors inject $1.2 bn in Australian PPP

[Exclusive] Korean investors inject $1.2 bn in Australian PPP

The investment via senior debt targets early 4% returns from the $8 bn construction, the largest road project in the state of Victoria


Jan 12, 2022 (Gmt+09:00)

Artist's impression of the completed Primary Package of the North East Link project (Courtesy of the Victoria State Government)
Artist's impression of the completed Primary Package of the North East Link project (Courtesy of the Victoria State Government)

Korean investors have injected around A$1.7 billion ($1.2 billion) with a 32-year maturity through senior loans for A$11.1 billion ($8 billion) in the Primary Package of the North East Link (NEL) project in the Australian state of Victoria, targeting early 4% returns, The Korea Economic Daily understood. The public-private partnership is the largest investment in a road project in the state.

The investment from South Korea took place late last year. It includes A$220 million from Mirae Asset Management Co., A$150 million from NH-Amundi Asset Management Co., A$100 million from Samsung Asset Management Co. and A$50 million from Hanwha Asset Management Co. Korea’s state-run Korea Development Bank (KDB), major bank KB Bank and The Export-Import Bank of Korea (KEXIM) injected a combined A$1.2 billion, sources familiar with the matter told The Korea Economic Daily.

The Korean investors that made commitments through Mirae Asset include KDB Life Insurance Co., Shinhan Life Insurance Co. Hanwha General Insurance Co., KB Insurance Co. and KB Life Insurance Co., the sources said. Other global investors include Manulife Financial Corp., Swiss Reinsurance Co., as well as investment firms IFM Investors Pty Ltd. and Vantage Infrastructure Ltd., the sources said.

The project will connect Melbourne’s two highways, Metropolitan Ring Road and Eastern Freeway. It will construct twin three-lane tunnels 6.5 kilometers in length, as well as provide tunnel systems, tolling infrastructure, parklands and wetlands, noise walls and 34-kilometer-long walking and cycling paths. The new link will be tolled, while the Eastern Freeway and Metropolitan Ring Road will remain toll-free, the Victoria State Government stated.

The Primary Package is expected to improve traffic flow for up to 135,000 vehicles daily and reduce travel times by up to 35 minutes. The project aims for completion by 2028.

The construction was awarded to the Spark consortium at end-October 2021. The consortium comprises Korean construction giant GS Engineering and Construction Co., WeBuild, CPB Contractors, Ventia, China Construction Oceania, Capella Capital, John Laing Investments, DIF Capital Partners and Pacific Partnerships.

Write to Jihyun Kim at snowy@hankyung.com
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