Norway. Hålogalandsvegen AS
| Date of agreement: | 20 Jun 2023 |
|---|---|
| Country: | Norway |
| Customer: | Hålogalandsvegen AS |
| Amount in NOK: | NOK 1,000 million |
| Amount in EUR: | EUR 86 million |
| Maturity: | 21 years |
| NACE sector / loan type: | Construction |
Project
NIB is providing the loan to a special purpose company established to finance, build, maintain and operate an 82 km long section of road in northern Norway under a 21-year public-private partnership contract for E10 Hålogalandsvegen (E10/rv. 85 Tjeldsund–Gullesfjordbotn–Langvassbukt).
The contract is tendered by the Norwegian Public Road Administration, Statens Vegvesen, and Skanska Norge AS will construct, operate and maintain the road.
The project consists of 82 kilometres of new and upgraded road, including 20 km of new-build 2 and 3 lane roads; 35 km of existing road upgrade, road widening, minor re-alignments and resurfacing; 7 rock tunnels of 2-10 km length with a total length of 27 km; and a number of bridges with lengths ranging from 20-200 metres. The project will also include pedestrian and cycle routes, facilitate local public transport, layby and resting areas and improved junctions and private access road connections.
The construction has started in March 2023 with early works agreements and is scheduled to be fully completed in December 2028, with several intermediate milestones linked to opening of specified road sections and receiving capital milestone payments from the public road administration. The special purpose company Hålogalandsvegen AS and its subcontractors will maintain and operate the road until November 2043, and then pass the responsibility back to the public administration.
The E10 is an important road westwards to Lofoten and Vesterålen from the main E6 road in Northern Norway. The PPP project will upgrade the road standards and shorten the E10 from Tjeldsund Bridge to Gullesfjordbotn by around 30 km and cut the travel time on the entire section by approximately 40 minutes.
Fulfilment of NIB's mandate
Productivity
The project will facilitate shorter and more predictable travel times for commercial and private traffic. This will have more broadly distributed impacts to the regional economy through more efficient goods and labour markets.
Expected productivity impact:
Capex NOK bn: 11.4
Length of roads km: 82
Average ADT at toll stations: 2236
Time savings in traffic min: 39
Environment
The upgrade and re-alignment of the E10 in northern Norway will have certain environmental benefits in the form of less travel time. The main social benefit is the safer route when most of the smaller villages are by-passed and thus no heavy traffic is in conflict with pedestrians, bicycles and normal traffic, less exposure to rock and snow slides, and safer over gradient reducing accidents. Overall, the project is negative for the environment due to the increased footprint on nature values like bogs and mires and river crossings.
Sustainability summary
This is a project with a potentially extensive environmental and/or social impact (category A, read more)
In general, for road projects that include tunnelling the main environmental aspects are limiting possible disposal sites; noise, dust and vibrations, water handling, including sediment traps, filtration; preventing possible spills of oil, explosives and diesel. The management plan also includes restrictions on discharges to spawning areas both and during fish migration. The loss of natural land and water areas impacts both biodiversity negative and is also a source of CO2 emissions due to release of soil carbon to the atmosphere.
For this specific project there is also impacts to the Sami people and their traditional reindeer herding. Specific measures are to be implemented both during the design in the form of reindeer overpasses and care taken during migration and calving season.
The project has undergone public hearings and all major concessions have been granted.
