SK ecoplant's Sotra Link inks financing and concession agreements

A rendering of the Rv.555 the Sotra Connection in Bergen, Norway. [SK ECOPLANT]

SK ecoplant is set to break ground in Norway this year on a 2.2-trillion-won ($1.8-billion) project with the local government.

The company announced Thursday that Sotra Link, a consortium with participation of SK ecoplant, inked the financing and concession agreement on the public-private partnership project with the Norwegian government to build “Rv.555 the Sotra Connection,” a 10-kilometer (6.2-mile) road system.

SK ecoplant, Australia's Macquarie Capital and Italy's Webuild set up the consortium. SK ecoplant, which owns a 20 percent stake in the consortium, will be responsible for engineering, procurement and construction.

The project will connect the cities of Bergen and Oygarden on the southwest coast of Norway to reduce traffic congestion.

The deal is the country’s biggest single infrastructure construction project, and is also the first project of its kind in the Northern Europe region for a Korean engineering company.

In the six months since being named the preferred bidder, SK ecoplant secured $860 million of funding from nine investors both home and abroad, including the Export-Import Bank of Korea (Eximbank Korea), Korea Trade Insurance Corporation, Korea Development Bank, CaixaBank of Spain, Germany’s KfW, Crédit Agricole CIB of France and Bank of China.

Korea Trade Insurance Corporation and the Eximbank Korea invested about 530 billion won in the project.

As the Norwegian government required the funding to be in local currency, the Eximbank Korea provided financial support in Norwegian krone through loans and guarantees, according to SK ecoplant.

In a public-private partnership project, corporations can draw profits from the commercial operation of the infrastructure. Sotra Link will operate the road system for 25 years after the construction is completed in 2027.

“Public-private partnership projects in advanced countries can be highly profitable by reducing financial and business risks,” said SK ecoplant CEO Park Kyung-il, adding that the company’s goal is to “further establish its position as a global developer based on the experience in multiple construction projects in European countries.”

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]