GIP Spectrum Announces Second Lien Term Loan Investment In Ferrocarril Central - Global Infrastructure Partners
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GIP Spectrum Announces Second Lien Term Loan Investment In Ferrocarril Central

Global Infrastructure Partners (“GIP”), a leading global, independent infrastructure investor, announced today that its credit fund, GIP Spectrum Fund, L.P., along with its affiliates (together “GIP Spectrum”, “Spectrum” or the “Fund”), previously closed on a $67.5 million participation in an aggregate $75.0 million Second Lien Term Loan investment (the “Term Loan”) in Grupo Via Central S.A. (“GVC”). GVC was established by Sacyr, NGE, Saceem, and Berkes (collectively “the Sponsors”), to design, construct, rehabilitate and maintain a 273 kilometer freight railroad connecting central Uruguay to the capital port city of Montevideo (“Ferrocarril Central” or the “Project”). The Project is underpinned by availability payments via a Public Private Partnership contract (the “PPP Contract”) between GVC and the Government of Uruguay (“GoU”) through the Ministry of Transport and Public Works.

Proceeds from the Term Loan, together with a first lien senior bank term loan, advance payments from the GoU and common equity from the Sponsors will fund the construction of the ~$1.1 billion Project. Ferrocarril Central is expected to reach operations in the third quarter of 2022. The Project will allow movement of various cargo (forestry, agriculture, containers, fuel) and pulp from a greenfield 2.1 Mtpa eucalyptus pulp mill under construction in Paso de los Toros. The Project was awarded to GVC in June 2019 under an availability-based concession backed by the GoU (Baa2 / BBB) for a period of 18 years, out of which approximately 3.25 years will be the construction and rehabilitation of the railroad line and 14.75 years will be maintenance of the Project.

The Ferrocarril Central transaction represents GIP Credit’s third capital commitment to Latin America and the second investment by GIP Spectrum. Spectrum invests in customized credit financings in GIP’s core sectors of midstream energy, power, renewables and transport, leveraging GIP’s significant operating expertise. “We are very pleased to have entered into this transaction with GVC and its Sponsors, Sacyr, NGE, Saceem and Berkers” said Jennifer Powers, GIP Partner and Chair of GIP Credit. “As the only direct railroad connecting central Uruguay with the Port of Montevideo, Uruguay’s primary point of import / export, the Project represents a highly strategic infrastructure investment for the GoU. The Project is expected to have significant economic impact, adding an anticipated $1bn per year to Uruguay’s GDP and creating 3,000 new jobs. This investment exemplifies GIP Spectrum’s ability to provide unique credit solutions for high quality, essential infrastructure projects, and be a reliable and flexible partner.”

“Working with GIP has been a tremendous experience. They are a trusted partner who provide solutions to problems as they arise. GIP has the ability to listen to and adapt their requirements to extraordinary needs and situations, such as COVID-19. We are looking forward to repeating this experience in the near future,” said Rodrigo Jimenez-Alfaro, Chief Financial Officer of Sacyr Concesiones S.A.

“For Saceem, a company with headquarters in Uruguay focused in the engineering & construction sector in Latin America, it has been a superb experience working with GIP. We look forward to hopefully working again with GIP in other initiatives in the region,” said Daniel Temesio, Chief Financial Officer of Saceem.