The Government of Alberta signed an agreement on September 10, 2008 with BBPP Alberta Schools Limited to design, build, finance and maintain 18 state-of-the-art schools in the province through a Design-Build-Finance-Maintain public-private partnership. The schools are scheduled to open in September 2010 and provide space for more than 12,000 students, and will cost the province $643 million. According to the Government of Alberta, this public-private partnership resulted in a savings of $118 million to the province compared to the cost of providing the same work through traditional delivery methods. This agreement represents the largest-ever Canadian schools P3 transaction and Alberta's largest social infrastructure P3.
Total debt aggregated approximately $460 million, including approximately $335 million in long-term lending, and a $125 million short-term tranche to remain in place until completion of construction. The financing, which was arranged by CIT Financial Ltd. (as agent), included both banks and institutional lenders, including Sun Life Assurance Company, The Manufacturers Life Insurance Company, Canada Life, Bank of Ireland, Sumitomo Mitsui Banking Corporation, National Australia Bank, The Toronto-Dominion Bank and Bank of Montreal.
Babcock & Brown's London-listed infrastructure fund, Babcock & Brown Public Partnerships, is investing 75 per cent of the project's equity, with GVest, an affiliate of Graham Construction, providing the remaining 25 per cent. The construction contractor for the project is a joint venture of Graham Construction and Bird Construction, and the renewal and maintenance contractor is Honeywell.
The lenders were advised by a team from Fasken Martineau DuMoulin LLP that included Brian Kelsall, Ella Plotkin, Jon Holmstrom, Tom Barlow and Marc Lefler in the Toronto office, and Richard Peters and Sheldon Good in Calgary.
BBPP Alberta Schools Limited was advised by its in-house counsel Candy Saga, and by Davis LLP with a team that included Doug Buchanan, QC, Mark Schmidt, James Bell, Michael Coburn and William He.