Socoprim has closed the $206.9 million debt financing for its Henri Konan Bedie toll bridge PPP in Cote d'Ivoire. The Eu270 million ($326.3 million) project is the first in Africa to use a minimum revenue guarantee and is the first part of a new programme of privately funded infrastructure developments from the government of Cote d’Ivoire. The bridge is also the first PPP to close in the country this century, after taking 16 years to close.

The Henri Konan Bedie toll bridge, named after the country’s former leader who was ousted from power in a military coup in 1999, was originally tendered as a concession by the government in 1996. Bouygues, the project company’s lead sponsor, with a 49% stake, was awarded the 30-year build-operate-transfer concession in 1997.  Additional equity investors in Socoprim are the Harith-managed Pan African Infrastructure Development Fund (22%), Total (4%), the government of Cote d’Ivoire and state-owned Banque Nationale d'Investissement de Côte d'Ivoire (25% between them).

Cote d’Ivoire was one of the most active African sources of project finance during the 1990s, bringing deals such as the 420MW Azito independent power project and the Felix Houphouet Boigny International Airport to market. Following the fall of the Bedie government, the country completely halted the procurement of privately-financed infrastructure developments. After Bedie’s successor Laurent Gbagbo was forced from office last year the new administration resurrected the deal.    

The 1.9km bridge will span the Ebrie lagoon in Abidjan, connecting the affluent neighbourhoods of Riviera to the north and Marcory to the south. In the north, construction will consist of a 2x2 lane dual carriageway that will connect with the junction of the Boulevard Mitterrand and Est-Ouest roads and on which the toll plaza will be located. To the south, construction will consist of a 2x3 lane dual carriageway with lateral access roads that will connect to Boulevard Valery Giscard d’Estaing through an interchange that the government of Cote d’Ivoire is financing directly. SACPRM, a subsidiary of Bouygues, is the construction contractor of the bridge and the interchange.

Abidjan is home to almost a quarter of Cote d’Ivoire’s population of close to 20 million, the largest city in Cote d’Ivoire country’s economic capital. The government produced traffic and revenue studies in 1998, 2001, 2002, 2008 and 2011 that revealed a willingness on the part of residents of Riviera and Marcory to pay for shorter journey times and higher levels of service on their roads. The Houphouet-Boigny Bridge and Charles De Gaulle Bridge already cross the Ebrie lagoon but these existing roads are more than 4km away from the proposed site and traffic across both bridges currently exceeds their combined design capacity by 22% each day.

Bouygues and the government are confident that this level of congestion and the impending closure of the Houphouet-Boigny Bridge for renovation in late 2014 will ensure high traffic levels for Henri Konan Bedie. Unlike the Dakar-Diamniadio toll road, which closed in Senegal in 2010, lenders will not be fully exposed to traffic risk.  

Under the minimum revenue guarantee scheme, the government will have to compensate, on a quarterly basis, the difference between the actual revenue and the guaranteed revenue. This covers the senior debt and the subordinated debt repayment in a worst case scenario over the life of the loan, excluding the debt’s grace period. The level of minimum revenue guarantee varies annually between Eu36 million and Eu68 million, with an average of Eu48 million.

The AfDB was lead arranger of the senior debt, and contributed Eu58 million ($71.8 million) directly. Additional senior lenders included Dutch development bank FMO with Eu12 million, Moroccan commercial lender BMCE with Eu12 million and the Africa Finance Corporation $18.2 million, while the West African Development Bank provided a loan denominated in local currency of CFA14.3 billion ($26.9 million). Each loan has a 15-year tenor and three-year grace period, except the BMCE debt which has a nine-year tenor and three-year grace period.

The African Finance Corporation was the lead arranger of the 15-year (three-year grace period) subordinated debt, in which the AFC ($23.1 million), Bouygues (Eu5 million), FMO (Eu8 million) and Pan African Infrastructure Development Fund ($21 million) participated.

MIGA is providing $145 million in political risk insurance covering the equity investments and subordinated loans from Bouygues and Pan African Infrastructure Development Fund, subordinated and senior loans from AFC, and senior loans from BMCE and FMO. MIGA’s coverage is for a period of 15 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.