Construction of a US $435m student accommodation is set to commence in East Africa; this is according to Sydney-based funding consortium, Crossway Capital (Crossway) which is currently calling for contractors with a strong track-record to bid on the 20,000-bed project.
Due to the location of the project, Crossway’s normal Lloyds of London-backed insurance wrapped project finance (IWPF) structure will need to be supported by grant and guarantor agencies.
In a statement, Crossway said it is confident a contractor that can demonstrate the required strong balance sheet or contracting track record will help get the project off the ground.
“While the country itself can be regarded as stable, it is not economically strong enough yet to achieve a proper credit agency rating, which naturally affects the financing structure. They are doing all the right things by way of building up their country for the future and we would like to assist as much as possible,” said David Rose, UK-based EMEA senior associate for Crossway.
The US $435m student accommodation
“But to meet the standards required by grant and guarantor agencies we need a contractor that can demonstrate an established track record in projects at this level, in Africa if possible. Crossway can provide the full capital requirement with the necessary guarantees, or the project can be funded with a mix of grant and guarantor participation. Our Lloyds of London underwriting syndicate can support the project to some extent, but only with a UK-based contractor,” the statement said.
Additionally, Rose said that the contractor can be based anywhere in the world although the focus has been on a USA and UK/Europe where grant and guarantor support is most available. The location of the contractor will largely determine which agencies are approached, he added, with experience of working with these agencies being a deciding advantage for the contractor.
“The project is shovel ready with all permits and permissions in place. Construction can commence as soon as financing is closed,” said Crossway.