Allens has advised the Federal Government on a $2 billion concessional loan for the second stage of Australia's largest urban road project, WestConnex.
The Commonwealth funding of the project represents a new model for Public-Private Partnerships (PPP) in Australia, as it is the first major road project to receive concessional loan funding from the Federal Government. The funding will be drawn pro rata with, but rank behind, $1.5 billion in private senior bank debt funding of the project.
WestConnex is a 33km road project that will complete Sydney's Orbital Road Network. It is Australia's biggest urban road project, with a total value of approximately $17 billion and is to be delivered in three stages over 10 years.
Partner Phillip Cornwell led the Allens team on this financing.
Phillip said it was important that a project of this size found an innovative funding solution.
'What we saw in this case was a combination of significant upfront public sector grant funding, supplemented by long-term interest bearing Commonwealth government concessional loans designed to support private sector debt co-funding and provide a platform for future private sector equity investment,' Phillip said.
'Australian governments, both federal and state, have expressed a desire to find new ways of partnering with the private sector to fund infrastructure projects on a basis that will provide a return on public capital invested.
'Stage 2 of the WestConnex project is a perfect example of that, and is the first use of concessional loans, adopting a similar funding model to that used in transport infrastructure projects in the United States.'
Phillip said the securing of the funding allows for the commencement of the design and construction phase of stage 2 of the project.
Allens legal team
Banking & Finance: Phillip Cornwell (Partner); Rob Watt (Partner); Scott McCoy (Managing Associate); Darko Vranesevic (Associate); Steven Faulkner (Associate), Nicholas Condylis (Lawyer).
Construction & Major Projects: Leighton O'Brien (Partner); Susan Bentley (Consultant); Tanvir Ahmed (Associate).
Notes for editors.
Allens is a commercial law firm working throughout Australia and Asia. Through its integrated alliance with Linklaters it provides clients access to 40 offices in 28 countries around the world.