About Agder OPS

OPS MODELS

PPP stands for Public Private Partnership and is used in several European countries. The Norwegian PPP model means that the overall responsibility for design, construction, financing as well as operation and maintenance over a longer period of operation is transferred from the public sector (the Norwegian Public Roads Administration) to a private operator.

Through PPPs, the private players bear the risk of any cost overruns. The public sector's most important role is to acquire land, put in place approved zoning plans and ensure that quality and functional requirements are met.

The main goal of the Norwegian PPP model is to achieve a more efficient implementation of road projects, while the public sector retains control and the opportunity for political choices.

The PPP project includes a total delivery of the road section from Øygardsdalen in Grimstad to Timenes in Kristiansand for an operating period of 25 years.

OWNERSHIP STRUCTURE

The construction of the new motorway is organized as a PPP project. PPP stands for Public Private Partnership. This means that a private operator is given the task of designing, financing, building, operating and maintaining the road.

Agder OPS Vegselskap AS signed a contract with the Directorate of Public Roads on June 23, 2006, and is responsible for the road until 2034. The current owner (100%) is BBGI Management HoldCo Sárl. Their website can be found at www.bb-gi.com

Agder OPS Vegselskap receives an annually agreed remuneration from the Directorate of Public Roads during the operating period.
The operating period runs for 25 years until 2034.

For the construction of the road, Agder OPS Vegselskap entered into an agreement with CJV E18 Grimstad - Kristiansand ANS. This company was a joint venture between Danish contractor E. Pihl & Søn AS and German Bilfinger Berger Ingenieurbau GmbH.

Vision and goals

The Ministry of Transport and Communications has defined the following main objectives for the new highway from Grimstad to Kristiansand:

• To help develop the E18 trunk road from Oslo to Kristiansand
• To contribute to developing Agderbyen into a robust living and working region
• To help strengthen the connection to Europe through the national port of Kristiansand and Kristiansand Airport

Financing

Financial model
The Directorate of Public Roads has entered into a contract with Agder OPS Vegselskap AS (hereafter Agder OPS). The contract means that Agder OPS will ensure that the new E18 between Grimstad and Kristiansand is financed, designed, built, maintained and operated. When the road was opened to traffic after a three-year construction phase, a 25-year operating phase began. Agder OPS did not receive any payment during the construction phase. After the road has been opened to traffic, Agder OPS receives an annual payment from the Norwegian Public Roads Administration during the operational phase.

The annual remuneration from the Directorate of Public Roads to Agder OPS will reflect Agder OPS's success in meeting the Directorate's overall objectives for this stretch of road. The main part of the compensation will be covered through payment for availability and operation. A high level of safety and a low number of accidents may result in bonus payments.

Agder OPSl financed the construction phase of the road system for a total of around NOK 3.3 billion over approximately three years. The company's capital consists of equity contributed by the owners, as well as borrowed capital in the form of loans from national and international banks. The European Investment Bank (EIB) financed almost half of the loan requirement. In addition, a loan was provided by the Nordic Investment Bank (NIB), Nordea and other international commercial banks. The interests of the lenders are protected by a tripartite agreement, which under certain conditions can give the lenders the right to enter into the PPP contract and have it performed on behalf of Agder OPS.