Concessionária Linha Universidade & Acciona ensure unmatched traceability in a pioneer funding mechanism for a 3.6 billion dollar project

Overview

Founded in 1997, Acciona is a multinational company backed by shareholders such as Societe Generale and STOA, that develops and manages sustainable infrastructure solutions, with a particular emphasis on renewable energy.

In 2020, Concessionária Linha Universidade & Acciona negotiated an innovative financing structure with Brazilian authorities, which allowed for the resumption of a major project, Line 6: a planned extension to the São Paulo metro, originally due to be completed by 2010. 

To make this public-private finance initiative a reality, Concessionária Linha Universidade & Acciona required an effective tool to:

• Ensure absolute auditability for confidential data
• Facilitate the secure engagement of a diverse range of potential investors from both domestic and international markets
• Streamline access for teams speaking different languages 

Concessionária Linha Universidade & Acciona selected Ideals, the platform that met all of their requirements and provided the level of control they were looking for, “everything we need happens like lightning, with prompt validation of documents when this is urgently required.”

The context

Acciona SA was established as a result of the merger of two Spanish construction companies. With headquarters located in both Madrid and Chicago, the company operates in 30 countries across five continents, employing over 30,000 professionals.

For the past two decades, they have been a pioneer in making infrastructure more sustainable, earning recognition as one of the 187 organizations listed in the CDP Climate Leadership Index 2014.

Given their successful experience in constructing metro lines in various cities worldwide, it was only natural for Acciona to be selected to build São Paulo’s newest Line 6 together with Concessionária Linha Universidade. This ambitious project, which will feature 15 stations connecting the world’s fifth-largest city, is the company’s most significant infrastructure endeavor to date.

Key challenges

The project required a sophisticated funding structure, and Concessionária Linha Universidade & Acciona would have to coordinate communications with a number of foreign investment banks as well as Brazilian investors, both public and private. 

In addition, it had considerable political importance as the first-ever limited-recourse project financing for the Brazilian Development Bank (BNDES). 

The loan was supported by a unique LC facility structure allowing for the provision of letters of credit and guarantees under Brazilian, US, Spanish, French, and Italian laws and in different currencies, which would set a precedent for funding future infrastructure projects in the country.

Concessionária Linha Universidade & Acciona’s immediate needs were:

• Providing immediate support across multiple time zones 
• Ensuring the security of all interactions, particularly regarding sensitive documents
• Guaranteeing accountability to the public sector stakeholders 

As soon as the room was set up, Saulo Moraes, Concessionária Linha Universidade & Acciona’s Financial Planning and Structuring Manager, was impressed with how rapidly they configure the data room: “People immediately had access once they’d received an invitation.” 

Solution

By using Ideals, Concessionária Linha Universidade & Acciona could guarantee the necessary level of traceability for their Public-Private Initiative (PPI). This was particularly crucial since BNDES has several specific preconditions for its loans. 

During the project, one of the remarkable advantages of the platform was its exceptional reliability, as the system has never crashed, “at no time did we ever have any problems. This was good for the deal as a whole.”

“Now, we can easily share all the information with different stakeholders, so they validate this information and give us a green card for BNDES to make the payment,” concluded Saulo.

The future

Concessionária Linha Universidade & Acciona currently has a team of around 300 users and 100 GB of storage on the Ideals platform, which they are also using for another Public Private Partnership (PPP). 

The Line 6 project was recognized with several awards in 2022, including Transport Deal of the Year at the IJGlobal Awards, Latin America PPP Deal of the Year and Overall Deal of the Year at the Proximo Awards Ceremony.

When asked about the most significant benefit of using Ideals, Saulo emphasized the ability to trace every aspect of the complex financing structure. With innovative and intricate financing mechanisms, it is essential to have control over every detail: “Sometimes, you need to argue when somebody says they saw or did something when they didn’t,” and, with Ideals, “we have that control!” he concluded.