WestConnex New M5 finance

Sydney Motorway Corporation achieved financial close for WestConnex New M5 on 20 November 2015. The financing approach was:

  • Sydney’s first toll road project involving patronage risk transfer with private sector debt without a Government guarantee in more than 10 years.
  • An unprecedented example of collaboration and cooperation across two government tiers, with both the NSW and Australian government providing funding.
  • Structured to maximise private sector investment and maintain financial efficiency and potential returns to shareholders (the NSW Government or the State).

Sydney Motorway Corporation successfully secured AUD$4.7 billion, funded via:

  • AUD$1.5 billion limited-recourse, senior debt provided by the private sector
  • AUD$2 billion limited-recourse subordinated loan provided by the Australian Government, which is the first of its kind for a major toll road project
  • AUD$1.1 billion contribution from the NSW Government equity contributions.

Sydney Motorway Corporation's New M5 financing strategy demonstrated a breakthrough in public private partnerships and has set a precedent in infrastructure financing. The approach was innovative because it:

  • Combined capital contributions from the NSW and Australian governments and private sector debt.
  • Included “limited-recourse” private-sector debt, minimising the financial impact on the NSW Government and its credit rating.
  • Provided funding certainty and enabling the acceleration of the project.
  • Supports a broader capital recycling strategy – delivering on a NSW Government priority for financing and providing an alternative funding source for later stages of WestConnex. Sydney Motorway Corporation will be able to lead procurement as contract aggregator and retain flexibility to progressively sell-down equity in the project if it is economically beneficial.
  • Was the first major road project to receive concessional loan funding from the Australian Government, which enabled Sydney Motorway Corporation to lock in long term finance and effectively manage risk.