Karolinska Hospital PPP
For any country the leap from small scale project financing to a major social infrastructure PPP is always a challenge.
History is dotted with countries whose reach exceeded their grasp with projects such as Alexandria schools in Egypt [Projects Database] earlier this year. When complete, the project will provide a link between the Sønderjyske motorway E45 and the Alssund area, and is expected to promote economic development in the area.
While there can be no doubt that in terms of its technical nature and future impact on society the Karolinska hospital project can - and should - be heralded as a triumph, the challenging nature of the financing has left a bad taste for many associated with the project.
Difficulties that are overcome in the spirit of co-operation and pursuit of a common objective can serve as a learning curve for all those involved - building confidence, expertise and enthusiasm for future deals.
However by the same token where difficulties are approached in a manner of obstinacy - or even confrontation - then the likelihood of a positive future relationship is small, particular given the stakes involved.
As such the future of social infra PPP in Sweden - particularly on a large scale project - is unlikely to be bright in the short-term without a significant change in cultural attitude.
The project at a glance
|Project Name||Karolinska Hospital PPP|
|Description||The project involves building a new 335,000m2 800-bed facility in Stockholm. The facility will include 300 dedicated beds on top of a further 100 in a patient hotel|
|Construction Stage||4 years|
|Total Project Value||SEK 10.5 billion (US$1.3bn)|
|Total equity||SEK 1.2 billion (US$154m)|
|Equity Breakdown||Skanska - 50 per cent - SEK600m (US$77m)
Innisfree - 50 per cent - SEK600m (US$77m)
|Total senior debt||SEK5 billion (US$640m)|
|Senior debt breakdown||SHB - SEK1.3 million (US$167m)
SEB - SEK800 million (US$103m)
BBVA - SEK500 million (US$65m)
Crédit Agricole CIB - SEK500 million (US$65m)
DNB NOR - SEK500 million (US$65m)
Nordea - SEK500 million (US$65m)
Lloyds Banking Group - SEK300 million (US$37m)
Mizuho - SEK300 million (US$37m)
Natixis - SEK150 million (US$19m)
KfW - SEK150 million (US$19m)
|Senior debt pricing||STIBOR (Stockholm Interbank Offered Rate) +215bps|
|Debt:equity ratio||88: 12|
|Mandated lead arrangers||SHB
Crédit Agricole CIB
Lloyds Banking Group
|Legal Adviser to sponsor||Ashurst|
|Financial Adviser to sponsor||RBC Capital Markets|
|Legal adviser to banks||Clifford Chance|
|Legal adviser to government||Mannheimer Swartling|
|Financial adviser to government||PwC|
|Technical and commercial adviser to government||White|
|Date of financial close||30 June 2010|