Manila North Tollways Project

completed

MNTC was created by Benpres, PNCC, and Egis to carry out the following works under the concession agreement (Supplemental Toll Operation Agreement): (a) Phase I: expansion and rehabilitation of the NLE, and construction of an 8 km Tipo-Subic expressway in the Subic Bay area; (b) Phase II: construction of a 16 km extension of the Metro Manila C-5 expressway; and (c) Phase III: construction of a 64 km expressway connecting the northern section of NLE with the Subic Bay area. At this stage, only Phase I (the project) is to be financed and implemented.NLE is in poor condition due to lack of proper maintenance and the section near Manila is highly congested. By expanding road capacity and improving road condition, the project would significantly lower road transport costs to the less developed, north and west region of NLE and stimulate regional growth, especially the Clark and Subic Special Economic Zones in the north and west of NLE which are focused on creating jobs based on the under-employed low-cost labor force. Consistent with the World Bank Group''s Country Assistance Strategy for the Philippines, IFC would cooperate with ADB and MIGA, as well as two export credit agencies, EFIC of Australia and COFACE of France, in this project and play a key role in creating an appropriate financial structure and advising the sponsors on technical issues based on IFC''s extensive experience in toll road projects. Due to the inherent risks in toll road financing, commercial banks are very selective in lending to toll road projects. There is also lack of local currency financing in the Philippines with interests and maturities that are appropriate for toll road projects. Given the project''s large investment requirement, the sizable participation and presence of IFC, ADB, EFIC, COFACE and MIGA is critical in presenting comfort to the participating commercial banks.