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PGGM, BAM joint venture acquires Germany motorway rights

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NETHERLANDS – The joint venture of PGGM and BAM PPP has acquired 50% of the concessional rights for the management and maintenance of a 52-kilometre stretch of motorway in Germany.

The deal concerns a stretch of the A8 between Augsburg and Munich that has been widened in recent years.

The concessional rights also lie with OFI Infra Via (25%), Egis Investment Partners (19%) and Berger Bau (6%).

PGGM said the investment in concessional rights was attractive, as they generate stable cash flows and proceeds linked with long-term inflation.

In 2005, Germany introduced an electronic toll on lorries using the country's main arterials, and the amount of income PGGM can expect to receive on the investment will depend on the number of lorries using the motorway.
 
Because of this "traffic risk", PGGM expects the returns on the rights to be larger than for other projects in the joint venture.

The pension fund declined, however, to reveal the expected level of returns or the scale of investment in the concessional rights.

The joint venture between PGGM and BAM aims to increase its investments and has tendered for projects in the UK, the Netherlands, Belgium, Germany and Ireland.

The options for new investments include projects similar to the A8 in Germany.

Currently, Germany has PPP-like construction lined up for several stretches of motorway and is planning to increase the number of these projects.

At the moment, the joint venture is bidding for the construction of a prison in Zaanstad, the new RIVM building in Utrecht, the renovation of the office of an abolished ministry in The Hague and an extension of motorway A9 near Amstelveen.

Since the start of the joint venture in 2011, it has invested in 12 projects, such as the roads A59, N33 and A12 in the Netherlands.

The combined market value of the joint venture, excluding the German project, is €160m.

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