Région Réunion NRL - Europe - FEDER

Home > English > Finance > Signature of the two loan contracts totalling €622M by the regional council (...)

Signature of the two loan contracts totalling €622M by the regional council of Reunion and the CDC for the construction of the New Coastal Road

12 juillet 2017

Signature of the loan contract of €450m

On December 6th 2011, the Regional Council and the CDC signed a memorandum designed to implement the guidelines set out in the Matignon Agreements, in order that the Regional Council may benefit from loans on savings funds at preferential rates, in application of the rules of engagement of the CDC Savings Funds Directorate.

The sum of €450m has therefore been provided for financing the New Coastal Road and the memorandum provided for the signing of the loan contract before 31st December 2013.

Following an assessment of the application and in view of the financial elements transmitted by the Regional Council in 2011, the CDC’s National Committee approved the project in July 2013.

The formal ceremony for signature of the €450m loan contract took place on 18th December 2013.

Loan characteristics :

Object : Construction of the New Coastal Road

Amount : €450 000 000

Duration : up to 40 years, plus the duration of the mobilization phase (maximum 5 years), if necessary

Rate : Livret A (savings accounts) Index + 1.00%

As the Livret A (French Savings) rate was 1.25% on 01/08/13, the borrowing rate for this period is therefore 2.2414%. The contract provides for a mobilization phase (maximum 5 years) and a depreciation phase (a maximum of 40 years with a grace period of 3 years).

Signature of the loan contract of €172m
The government asked the CDC to set up an exceptional loan on savings funds of €20 billion for the period 2013-2017 in order to finance long-term projects in the local public sector.
Projects of the following ten sectors are eligible for loans on savings funds :

> Public transport,
> Renovation of drinking water networks and sanitation infrastructure,
> Prevention of flood risks,
> Waste recovery,
> Very high-speed broadband,
> Large-scale renovation of public buildings (thermal renovation, accessibility, compliance with safety standards, earthquake-proofing),
> Grants from local authorities for development projects (construction, land acquisition) for social housing,
> Universities,
> Construction of new schools (primary and secondary),
> Hospitals, when projects are included in the list of projects approved by the DGOS (Regional Healthcare Directorate).
The New Coastal Road project was presented as part of the public transport component, following an assessment by the contracting authority of all works attributable to TCSP (lanes specific to public transport).

Following an evaluation, the project was approved by the CDC National Committee which met in November 2013 and permitted the loan contract to be signed.
It should also be noted that this is the first contract signed in Reunion by the CDC under this €20 billion package.

Loan characteristics :

Amount : €172 638 000
Duration : a maximum of 40 years (5 years for the mobilization phase)
Rate : Livret A(savings accounts) index + 1.00%