Image: Latvian State Roads (LVC)
16 Jul 2021
NIB finances road bypass PPP project in Latvia
NIB and the AS “Kekava ABT” have signed a 21-year loan agreement of EUR 61.1 million for co-financing the construction of the Kekava Bypass road project, which is to become the first major private-public partnership (PPP) project in Latvia.
AS “Kekava ABT” is a newly incorporated company set up to design, build, finance and operate the Kekava Bypass road project under a PPP agreement with the Latvian Ministry of Transport.
The project comprises the construction and maintenance of a 17.5 kilometre stretch of road bypassing the town of Kekava, of which 14.4 kilometres will be newly built and 3.1 kilometres existing road. Kekava Bypass will become a part of Trans-European Transport Network (TEN-T) and Via Baltica (E67) – a 1,722 km road joining six countries from Prague to Helsinki.
“The road in question, E67, is a vital international corridor and a strategically important road, especially for our Baltic member countries. The Kekava Bypass project is the first major PPP project in Latvia, and thus, the project can give an incentive for other larger infrastructure projects in the region,” says André Küüsvek, President and CEO of NIB.
The new bypass will be a modern four-lane bypass with parallel roads, bridges and tunnels. The construction of the Kekava bypass will improve the traffic flow in and out of Riga towards Lithuania and the rest of Europe.
NIB is co-financing the project together with the European Investment Bank (EIB).
The public partner in this project is the State Ministry of Transport, on whose behalf the project has been negotiated and will be implemented by Latvijas Valsts Celi (LVC, Latvian State Roads).
The borrower, AS “Kekava ABT”, has been created by, and is owned by the consortium. The consortium consists of the Luxembourg-registered infrastructure fund TIIC 2 S.C.A. SICAR as well as Latvian construction firms AS A.C.B. and CBF SIA Binders. The consortium was chosen by the Latvian State Ministry of Transport as the preferred bidder after the conclusion of a tendering process for the project. The partnership contract validity period is 23 years.
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.
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