Lovells and Vieira de Almeida join forces to bag landmark financings

Lovells and Portugal’s Vieira de Almeida & Associados have secured new instructions on bids for two of Portugal’s latest project-financed road deals after concluding a novel financing on the Litoral Centro toll road.

The firms advised the Brisal consortium, led by private motorway operator Brisa, on the €795m (£546.2m) Litoral Centro motorway, linking Marinha Grande and Mira along Portugal’s Atlantic coast.

Linklaters, led by partner Andrew Jones, advised lead arrangers BCP Investimento, Banco Santander de Negocios Portugal, Caixa – Banco de Investimento, Mizuho Corporate Bank and DEPFA. Vinson & Elkins advised the European Investment Bank (EIB), which provided 50 per cent of the financing. Portuguese firm Miguel Galvao Teles provided Portuguese law advice to the banks and the EIB.

The deal – which was more than three years in the making – was shrouded in controversy during its early stages, when one of the losing bidders sued the government after failing to win the contract.
In a novel twist, the concession agreement is for a variable term. It is the first project-financed variable-term motorway concession in Europe to date.

Lovells and Vieira de Almeida have since secured follow-on instructions from Brisa to advise on its bids for the €300m (£206.1m) Grande Lisboa and the €700m (£480.9m) Douro Litoral road projects.

The Litoral Centro deal is structured as a ‘real toll’ project and follows last month’s highly publicised decision by the Portuguese government to move away from ‘shadow toll’ projects. Under the shadow toll system, the government pays an agreed amount to the private sector, which is designed as a protection if usage on the road, and thus toll revenue, dips. Under real toll projects, the financial and revenue risks rest wholly with the private sector.

Portugal’s decision will see seven existing shadow toll projects renegotiated with a view to placing financial risk entirely on the shoulders of the private sector. The government is expected to tender shortly for law firms to advise on this renegotiation process.

London projects partner Shibeer Ahmed led the Lovells team on the deal, working with Vieira de Almeida partner Joao Vieira de Almeida. The Portuguese government was advised by local firm Flaminho Roza.