ICBC contributes to a $1.46698 billion AUD term loan of a $1.554 billion AUD syndicated loan for the Sydney Light Rail (SLR) Public-Private Partnership (PPP) Project

Project narrative

On December 17, 2014, a syndicate of four banks entered into a $1.466 billion AUD syndicated loan agreement with Astra SLR Finance Pty Limited — an Australia-incorporated special purpose vehicle jointly owned by Australian superannuation fund First State Super (62.5% equity stake), British investor, developer, and operator of privately financed, public sector infrastructure projects John Laing Group plc (32.5% equity stake), and Spanish multinational conglomerate Acciona, S.A. (5% equity stake) — for the Sydney Light Rail (SLR) Public-Private Partnership (PPP) Project. Financial close was achieved on February 25, 2015, with a fifth bank joining. Syndication was launched in March 2015. Then, circa May 11, 2015, syndication was closed, with 12 banks — including the Industrial and Commercial Bank of China (ICBC) — joining the $1.554 billion AUD ($1.22529 billion USD) syndicated loan agreement, raising the number of lenders to 17. The miniperm loan was divided into two tranches: a $1.46698 billion AUD ($1.15668 billion USD) term loan tranche and a $87.03 million AUD ($68.62 million USD) debt service reserve facility tranche. The loan carried a maturity period of seven years, a final maturity date of February 25, 2022, and an interest rate of BBSY plus a margin of 200 basis points (bps). Record ID#110783 captures ICBC's contribution to the $1.46698 billion AUD term loan tranche. Record ID#110789 captures ICBC's contribution to the $87.03 million AUD debt service reserve facility tranche. In addition to ICBC, the following lenders contributed to the loan syndicate: Commonwealth Bank of Australia (CBA), Crédit Agricole S.A., Banco Santander, S.A., Bank of Nova Scotia (Scotiabank), United Overseas Bank Limited (UOB), AustralianSuper Pty Ltd, DZ Bank AG, IFM Investors Pty Ltd, ING Bank N.V., Mizuho Bank, Ltd., National Australia Bank Limited (NAB), QBE Insurance Group Limited, Sumitomo Mitsui Banking Corporation (SMBC), Sumitomo Mitsui Trust Bank, Limited (SMTB), United Super Pty Ltd, and icare (Insurance and Care NSW). CBA, Crédit Agricole, Banco Santander, Scotiabank, and UOB were the original underwriters and committed the respective amounts to the term loan tranche: CBA ($236.00 million AUD; $186.08 million USD), Crédit Agricole ($141.60 million AUD; $111.65 million USD), Banco Santander ($141.60 million AUD), Scotiabank ($141.60 million AUD), and UOB ($161.37 million AUD; $127.24 million USD). The proceeds were used by the borrower to the finance SRL PPP project which sought to 1) design, construct, commission, operate, and maintain a new 12-kilometer long, 19-stop dual-track light rail line, known as the CBD and South East Light Rail (CSELR), stretching from the Central Business District (CDB) and south-east Sydney that would run from Circular Quay through Surry Hills to Sydney Central Station on George Street, and then Moore Park before dividing to serve via Alison Road and High Street the Prince of Wales Hospital at Randwick as the L2 Randwick Line and, via via Anzac Parade, Kensington and the University of New South Wales in Kingsford as L3 Kingsford Line featuring 19 stops, a bridge over the Eastern Distributor roadway facilitate access to Randwick, Kensington, and Kingsford, a tunnel underneath Moore Park, with associated light rail vehicles (LRVs), namely 30 of ALSTOM's 67-meter coupled pairs that could carry 450 people each, control center facilities, terminus facilities, interchanges, substations, and depots for the maintenance and stabling of the LRVs as well as public domain works including a pedestrian zone in George Street from Hunter Street to Bathurst Street and modifications of existing public roads, footpaths, and cycle ways, utility services, and private properties, under a concession operating until 2034; and 2) operate and maintain, under a 25-year concession, the existing 12.9-kilometer (8.0 mile) 23-stop Inner West Light Rail line stretching from the Inner West/Central Station to Dulwich Hill known as the L1 Dulwich Hill Line, the original line of the SLR network that began services in 1997 with its final 5.6-kilometer section opening in 2014 (the SRL PPP, therefore, managed the entire 25 kilometers long SLR). Travel time on CSELR portion was to be from 37.5 to 38.5 minutes for 97% of the time. Transport for New South Wales named Connecting Sydney, a consortium of Transdev Sydney, Alstom Transport Australia, Acciona Infrastructure Australia and Capella Capital, as preferred bidder in October 2014. On December 18, 2014, Transport for NSW signed a PPP contract with ALTRAC Light Rail consortium (formerly named Connecting Sydney) to design, construct, operate, and maintain the CBD and South East Light Rail. The project was first announced in 2012. The project had a cost of $2.081 billion AUD ($1.64082 billion USD). In addition to the debt, the sponsors provided $527.00 million AUD ($415.53 million USD) in equity, with First State Super providing $329.37 million AUD ($259.70 million USD), John Laing contributing $171.27 million AUD ($135.04 million USD), and Acciona giving $26.35 million AUD ($20.78 million USD). Capella Capital was sponsor, infrastructure developer, and financial advisor. The project was expected to improve in public transport in Sydney, offering connectivity to the CBD from the residential, educational, and medical areas in the southwest and improve access to event venues at Moore Park. The project was expected to create over 10,000 jobs and create over $4 billion AUD in economic benefits to New South Wales. The project's utility in alleviating congestion in Sydney via safe and sustainable transport was also of importance. The project implemented initiatives to reduce water use, including LRV washing, depots, and heating, ventilation, and air conditioning (HVAC) geothermal cooling system that reduced total water consumption of over 10%. Furthermore, the project managed to reuse 100% of spoil generated and diverted more than 95% of inert and non-hazardous waste from the landfill and 88% of office waste material from the landfill. The project included wire-free tram operation via ALSTOM's Aesthetic Power Supply (APS), a ground level power supply system which provides catenary free (wire free and pole free) tramway operation, unaltering views of Sydney's historical landmarks. ALSTOM's Harmonic and Energy Saving Optimiser, a reversible substation, was used to allow 99% energy recovery during tram braking to be re-used in the network or wider electric grid. The underground High Cross Park electrical substation used a geothermal air condition system to move hot air out of the building via earth loops. The LRVs also featured permanent magnetic motors that had a higher power to weight ratio, making them more energy efficient, require less maintenance, and move more quietly. Transport for NSW (TfNSW) was responsible for planning, procuring and delivering the project. Alstom Transport Australia Pty Limited and Acciona Infrastructure Australia Pty Ltd together were the design and construction contractors. Transdev Sydney Pty Ltd was the operations & maintenance contractor. Grimshaw designed all 19 stops for the CDB and South East Light Rail. ASPECT Studios was responsible for the design, development, and construction design of various outdoor spaces on George Street to include a tree-lining on the boulevard, adding community spaces at Surry Hills, making pedestrian areas between Hunter and Bathurst Streets, redesigning Circular Quay to allow for better interchange between the various transit options, adding connections to Moore Park via Chalmer Street, and adding interchanges at the Kingsford and Randwick termini. SLR DJV, a joint venture of GHD Group Pty Ltd and Jacobs, provided the detailed engineering design for the civil, structural and selected systems for the light rail and provided the lighting, structures and pedestrian modelling for the stop and designed the street lighting, pavements, footpaths, and cycle ways. Morris Goding Access Consulting (MGAC) and BCA Logic Pty Ltd consulted on accessibility, universal design, fire and life safety expertise, inspections, and Crown Certification for the project. SYSTECH provided contract management and project scheduling services. CaSE Contractors provided engineering support to the construction and utilities team during the construction. At the time of PPP signing, some early work had already begun, with major construction was scheduled to begin after Anzac Day 2015 (April 25, 2015) to minimize impact on residents and businesses, with major construction to finish by late 2018 {see ID#225733}}. The original completion date for the project was for March 2019 (just prior to the New South Wales state election, with the New South Wales government). On July 2, 2015, ALTRAC Light Rail took over the operation and maintenance of the Inner West Light Rail network. Construction began in October 2015. The L2 Randwick Line opened on December 14, 2019. The L3 Kingsford Line opened on April 3, 2020. The project experienced significant delays, controversy, and legal issues. By March 2018, Transport for New South Wales reported that construction was $213 million AUD behind schedule and that the project was expected to cost $135 million AUD over budget. In April 2018, Acciona Infrastructure Australia Pty Ltd and Alstom Transport Australia Pty Limited filed a lawsuit in the New South Wales Supreme Court, alleging that the New South Wales Government had engaged in misleading or deceptive conduct when providing information on how to manage electricity cables on George Street. Acciona sought $1.2 billion AUD in further payments, while the Government of New South Wales imposed fines on it and accused of trying to delay the project instead of fulfill its contract. Said dispute over the treatment of underground electrical infrastructure along the line’s route was one of the primary causes of the delay. Acciona claimed that after financial close Ausgrid (an electricity distribution company serving Sydney) issued a set of requirements that were completely different and more stringent than what was originally expected, including work on 106 utility pits, extra relocations of services and adding spare conduits. Acciona claimed that it would not have been pursued the contract under the terms. Transport for New South Wales conducted negotiations and on June 3, 2019, a settlement agreement was announced that resolved the disputes, bringing new construction and delivery milestone incentives for the consortium in exchange for the lawsuit being permanently withdrawn; the settlement cost the government $576 million AUD, including $44.0 million AUD of incentive payments and a two-year extension of TransDev's concession (to 2036, worth $221 million AUD). In November 2019, the project cost was revised to $2.993 billion AUD. Due to the cost increase, the Government of New South Wales provided a guarantee for a $500 million AUD loan from private sector banks. The delay and budget overruns were seen as politically costly for Gladys Berejiklian, who had overseen the project's awarding as Minister for Transport and then was the Premier of New South Wales for its construction and had picked the expected completion date for March 2019, before to the state's elections (intended to show the incumbent government's competenence). Opposition New South Wales Labor Party claimed that Berejiklian rushed the project, which should have required two years to plan. Concerns over the commercial viability of the line also dodged the project, with leaked documents in September 2018 suggesting the Government of New South Wales had been aware of potential weak viability back during planning in 2012, with the best-performing the Circular Quay to Randwick route projected to only return $0.80 AUD in economic benefits for each dollar spent and that expected congestion relief and travel time improvements would not be significant. An appraisal done in New South Wales made the project had positive effects after incorporating unconventional economic benefits that received criticism for being on shaky ground. For example, projected savings due to the termination of bus service, $47.0 million USD in the 2013 report, later were estimated to be significantly less. Furthermore, a group of businesses, including those on George Street where much of the line took place, filed a class action lawsuit against the Government of New South Wales for damages caused by disruption of businesses during construction. Initially the businesses won $4 million AUD but was appealed. In May 2025, the High Court of Australia held a hearing on the case. In June 2020, the Auditor-General of New South Wales released a report on the CDB and South East Sydney Light Rail portion, finding that Transport for New South Wales had not consistently and accurately updated project costs, limiting the transparency of reporting to the public, having failed to include all costs incurred by the project between February 2015 and December 2019 and from February 2015, it did not regularly publish financial performance and risk reports to project governance bodies. The total cost was to exceed $3.147 billion AUD, with $153.84 million AUD of additional costs due to omitted costs for early enabling works, the small business assistance package, and financing costs attributable to project delays. Other controversy related to the project included criticisms that the SLR would not have capacity to replace the bus routes it would eliminate, that it would disrupt automobile traffic, that it would cut down over 1,000 trees including in the parks near Centennial, Moore, and High Cross and eliminate park lands, and that businesses would lose business due to construction. Then, on July 4, 2019, financial close was reached on a deal in which a syndicate of 18 banks — including ICBC — entered into a $1.55401 billion AUD ($1.09351 billion USD) syndicated loan agreement with Astra SLR Finance Pty Limited for the 2019 Sydney Light Rail (SLR) PPP Refinancing Project. The loan carried a maturity period of seven years and a final maturity date of July 4, 2026. The loan was divided into two tranches: a $1.46698 billion AUD ($1.03227 billion USD) term loan tranche and a $87.03 million AUD ($61.24 million USD) debt service reserve facility tranche. The proceeds were to be used by the borrower to refinance the existing debt on the Sydney Light Rail PPP Project. ICBC contributed $74.70 million AUD ($52.56 million USD) to the $1.46698 billion AUD term loan tranche, as captured by Record ID#110790. ICBC contributed $4.43 million AUD ($3.12 million USD) to the $87.03 million AUD debt service reserve facility tranche, as captured by Record ID#110791. Then, on July 2, 2021, financial close was reached on a deal in which a syndicate of five banks — including ICBC — entered into a $717.20 million AUD ($535.50 million USD) syndicated green loan agreement with Astra SLR Finance Pty Limited for the 2021 Sydney Light Rail (SLR) PPP Refinancing Project. The loan carried a maturity period of 12 years and 2 months (12.166 years) and a final maturity date of September 16, 2033 and was divided into a $697.00 million AUD ($520.42 million USD) tranche and a $20.20 million AUD ($15.08 million USD) tranche. The refinancing loan qualified as a green loan because, among other things, the SLR Project was expected to reduce greenhouse gas emissions by 663,000 tons over 30 years. The proceeds of the loan were to be used by the borrower to refinance the existing debt of SLR Project and were fully drawn down for that purpose on July 2, 2021. ICBC contributed $89.22 million AUD ($66.62 million USD) to the $697 million AUD tranche, as captured by Record ID#93867. ICBC contributed $2.58 million AUD ($1.93 million USD) to the $20.20 million AUD tranche, as captured by Record ID#93868.