A consortium led by Paris’ transport operator, RATP, has reached financial close on the €344 million (US$476 million) refinancing of Tram di Firenze (Florence Tram) Public Private Partnership in Italy.
Steer Davies Gleave provided technical due diligence to the lending banks.
Primary financing was approved in 2005, however since then the light rail project has undergone a redesign at the request of the grantor, the municipality of Florence. The project involves a 35-year concession, and entails the design, build, finance, operation and maintenance of the light rail network Lines 2 and 3, and the operation and maintenance of Line 1 which was funded by the public sector and opened in 2010.
The refinancing comprises a €166 million bank loan, with the project sponsors providing €28 million of equity. The municipality, central government and EU grants will finance the remainder of the project costs. The municipality shoulders demand risk by providing a guarantee on traffic revenues for the first 10 years of operation. In addition to RATP,the project sponsors include Florence's transit agency, local contractors, Alstom and Ansaldo.
The three interconnected lines serve the cities of Florence and Scandicci. Line 1 connects Florence's mainline railway station to Scandicci. Line 2 will connect the city centre with the airport and Line 3 will connect with the main city hospital Careggi.
When complete the light rail network will be over 20 km in length, with 44 stops.
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