NETHERLANDS - The €105bn pension provider PGGM and construction company Royal BAM Group have transferred for the first time three Public Private Partnership (PPP) projects to their existing joint venture, BAM PPP PGGM Infrastructure Coöperatie.
This transfer represents the first of a series of 12 existing PPP projects from BAM PPP's European portfolio into the joint venture, which was formed earlier this year.
The projects are transferred with an equity value of around €45m and a total project value of almost €300m.
According to PGGM, these assets will immediately yield stable cash flows and further provide long-term inflation-linked returns.
It said the revenues from the PPP projects were secured through long-term concession agreements with governments and therefore considered to have a modest risk profile.
As for BAM PPP, the transfer puts into action the strategy of Royal BAM Group for structured divestment to realise some of the underlying value in its portfolio of PPP projects.
In addition, it realises a recycling of funds in operational projects to support the active bidding programme, while permitting BAM to continue as a long-term partner to the projects.
The transfer of 80% of these projects results in a book profit of more than €10m for BAM, the construction company said.
Under the agreement, it will retain responsibility for bid management for new projects and asset management services.
It will also represent the joint venture in transactions and hold a 20% interest through the joint venture.
The objective of the 50/50 co-operation is to invest in developing transport projects and public buildings in a PPP, not only in the Netherlands, but also the UK, Ireland, Belgium, Germany and Switzerland.
In addition to the transfer of existing PPP projects, the joint venture is currently actively bidding across these markets for new projects with a commitment of €240m.