The South African National Roads Agency Limited (Sanral) has raised an additional R750 million for its national roads improvement project.
Including the R9.95 billion raised earlier this year, Sanral has now raised R12.2 billion funding for the expansion and upgrade of toll roads. The agency is on its way to raising the first R22 billion in debt finance to fund its upgrade project, ensuring e-tolling will be a reality in 2010.
The funding is being raised through the Domestic Medium-Term Note programme (DMTN), which will allow Sanral to issue notes covered by a government guarantee, on an ongoing basis. In the second auction under the programme, the agency tapped into two bonds with maturities in 2020 and 2034.
The agency reports that overall bids received during the auction totalled R1.805 billion and R750 million of bonds were allocated at market spreads of 0.75% and 0.77% over the South African government benchmarks.
Sanral needs to raise R25 billion for the second phase of its upgrade project and an additional R20 million for the third phase. More than R20 million of the total funding is expected to go towards the Gauteng Freeway Improvement Project (GFIP), which is planned to be completed before the 2010 Fifa World Cup.
The GFIP is an initiative which aims to provide an interconnected network of inner and outer ring roads as a solution to the traffic congestion experienced in Gauteng. The 185km of new toll infrastructure will see the N1 to Pretoria, Johannesburg ring roads and the R21 to Pretoria, become electronic tolling zones. Roads will be operated on the user-pays principle after October 2010.
The agency says it will raise another R12 billion by the end of March 2010, while R50 million had been allocated to its so-called HWAY bond. Sanral added that most of its capital would be raised through the DMTN programme.
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