DBJ Builds Up Investment Interest in PPP Concession in EuropeanHigh-Speed Rail Project

Development Bank of Japan Inc. (Toru Hashimoto, President & CEO) has built up an investment interest in the European transportation sector’s largest high-speed rail project implemented under the PPP-concession method. DBJ’s investment will come to approximately JPY 9 billion. This investment has been achieved through the existing partnership with Meridiam Infrastructure, a specialized long-term investor focused primarily on investing in greenfield infrastructure projects globally, with strategic focus on Public Private Partnership assets in Europe and North America.

The project involves the construction of a new, 301-kilometer rail line between the French cities of Tours and Bordeaux under a 50-year concession contract. The line will be an important link in the Trans-European Transport Networks (TEN-T) scheme for connective transport service across Europe, and is seen as a significant policy element by the French government and the European Union ? both of which, along with their public institutions, have provided it with strong support. With a total cost of approximately JPY 1,120 billion, the project is expected to generate long-term income gains after its scheduled completion in 2017.

Infrastructure investments are drawing keen interest in countries across the globe, and Japan is no exception. With severe fiscal constraints in Japan, steps to encourage private investment are of urgent importance, and the concession-type PFI scheme has been introduced with the amendment of the Act on Promotion of Private Finance Initiatives (the “PFI Act”). In its Japan Revitalization Strategy, the government recommends the concession scheme as a means of “opening up the construction and operation of public facilities to the private sector (through expansion of PPP and PFI initiatives).” Some 12 trillion yen in PPP/PFI is being considered for projects involving airports, roads, water and sewage works, and other infrastructure elements over the next ten years. In addition, investment in infrastructure is considered and used as a popular and effective measure of asset management and investment among overseas pension funds, and pension funds and institutional investors in Japan are also showing growing interest in this class of assets.

Taking advantage of skills, risk evaluation techniques and other resources it has gained through its involvement in infrastructure finance, DBJ will continue investing and financing in concession-type and other advanced infrastructure projects overseas. And, by actively applying these various skills and know-how to projects to be carried out in Japan, the bank hopes to inject new energy into the Japanese economy. Also, DBJ intends to share with Japanese pension funds, institutional investors and others the asset management and investment opportunities we discover at home and overseas, thereby meeting investors’ diversifying needs for access to high-quality investment outlets.

DBJ’s corporate philosophy is “Applying financial expertise to design the future”. Using creative financing techniques, DBJ is committed to working with customers to resolve their problems, earn their trust and build a prosperous future.


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