Narrative
Full Description
Project narrative
On December 20, 2023, financial close was reached on a deal in which a syndicate of eight lenders — including the Industrial and Commercial Bank of China (ICBC) — entered into a $534.12 million AUD ($361.75 million USD) syndicated loan agreement with Canberra Metro — an Australia-incorporated special purpose vehicle (SPV) jointly owned by Pacific Partnerships Pty Ltd. (37% equity stake), Chinese state-controlled John Holland Pty Ltd (37.5% equity stake), and Aberdeen Infrastructure Investments Limited (25% equity stake) — for the Canberra Light Rail Stage 2A Public Private-Partnership (PPP) Project. The term loan facility was a green loan which carried a maturity period of five years and six months. The proceeds will be used by the borrower to finance an extension of the Canberra Light Rail, adding new infrastructure and three new stops along 1.7 km. ICBC contributed $73.39 million AUD ($49.71 million USD) to the facility. The following lenders also contributed the following amounts: Australia and New Zealand Banking Group ($44.85 million AUD; $30.38 million USD), CaixaBank, S.A. ($73.39 million AUD), Crédit Industriel et Commercial (CIC) ($40.77 million AUD; $27.61 million USD), Crédit Agricole Group ($73.39 million AUD), MUFG Bank, Ltd. ($81.55 million AUD; $55.23 million USD), Société Générale S.A. (SocGen) ($73.39 million AUD), Standard Chartered Bank plc ($73.39 million AUD). The second stage of the Canberra light rail project is divided into two stages: 2A and 2B. This facility supports the 2A stage of construction, and will connect Canberra CBD to Woden via the Parliamentary Triangle, including three new stops at City West, City South, and Commonwealth Park. The facility will also provide financing for expansion works of the Mitchel depot, raising the London Circuit, constructing a bridge over Parkes Way, improvements to traffic signals and roads, and the procurement of four light rail vehicles. The light rail expansion garnered some criticism regarding the cost of the PPP project, particularly with regard to extant government debt.
Staff comments
1. The specific borrowing institution is unknown. The borrower appears to be a special purpose vehicle (SPV) under the Canberra Metro Consortium. The ownership of Canberra Finance Pty Ltd, which refinanced its debt for stage 1 of the Canberra Metro project concurrently with the financial close of stage 2A of the project, is as follows: Pacific Partnerships Pty Ltd. (25% equity stake), Chinese state-controlled John Holland Pty Ltd (25% equity stake), Mitsubishi Corporation (25% equity stake), and Aberdeen Infrastructure Investments Limited (25% equity stake). While sources claim that the ownership of the borrower for stage 2a is different, it is possible that the exact borrower was Canberra Finance Pty Ltd and the ownership had not changed. This issue merits further investigation.