Spanish developer Sacyr is hoping to enter the North American concession sector, whilst continuing to focus on Europe and Latin America – partly through an infrastructure fund it launched last year and which recently reached first close.
The Madrid-headquartered company said on Tuesday (4 June) during an investor day that it is planning to invest significantly in the US and Canada, two markets in which it has not secured any concession projects.
It hopes to first enter these regions by bidding for construction projects, before launching a concession operation in the region. It also said it plans to co-invest with local partners and major financial investors in North America.
The company has identified a significant pipeline of concession projects globally it might bid for, which include 16 PPPs and concessions in Canada and the US.
The investor day coincides with the transfer of a seed asset – the Italian toll road Superstrada Pedemontana Veneta (pictured) – to a new Sacyr-backed infrastructure fund, following the opening to traffic of a stretch of the motorway this week.
This fund, Circuitus Real Asset I, reached first close with over EUR 450m of commitments from Sacyr and Fininc at the end of 2018, according to a statement from London-headquartered Circuitus Capital, the fund manager. Circuitus Capital was founded by Carsten Kengeter, Niccolo Ragnini Kothny as well as Sacyr and Fininc.
The manager hopes to raise EUR 2bn of commitments by final close of the fund, which is expected to invest in transport, utilities and energy projects mainly in Europe and Latin America.
The closed-ended euro denominated fund has a 12-year duration with a five-year investment period, with an average investment of EUR 200m for controlling stakes in both brownfield and greenfield projects.
As part of its agreement with Sacyr and Fininc, the fund will have the right of first offer on the two developers’ pipeline of investment opportunities.
Pedemontana is a 39-year availability-based concession for 162 km in the northeast of Italy, with a total investment of EUR 2.6bon.
Sacyr – whose last concession-focused investor day took place four years ago – said it expects the size of its concession portfolio to reach EUR 2.7bn by 2031, versus EUR 1.8bn today.
Its 44 existing concession assets are located in 10 countries including Spain, Portugal, Italy and Latin America, and have an average remaining concession life of 27 years.
Over the past four years it has invested EUR 344m of equity in concession projects, and expects to commit another EUR 546m of equity over the next four years.
It is also targeting nine undisclosed DBFOM schemes in Europe – including three motorway projects, four social infrastructure PPPs and two rail schemes worth a combined EUR 3.8bn, according to a Sacyr presentation.
To fund new opportunities, the company plans to continue its asset rotation policy, with the sale of minority stakes while retaining control of assets.
However, it said that by 2021 its existing portfolio should self-sustain, meaning that projects it has won will by then receive either tolls or availability payments from authorities and therefore the company will be able to repay debt from these sources.
Since 2015 it has earned EUR 322m in cash from its sale of nine concessions, including its stake in Itinere, it said.