Infrastructure

Upgrading Korea’s transport infrastructure network

Incheon Grand Bridge (IGB) is a critical piece of infrastructure in Korea, providing a direct pathway to Yeongjong Island where Incheon International Airport is located.

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Sector Infrastructure
Sub-sector Transport
Location Korea

Opportunity

Incheon Grand Bridge (IGB) is a critical piece of infrastructure in Korea, providing a direct pathway to Yeongjong Island where Incheon International Airport is located.

Incheon International Airport is the Korea’s largest airport with approximately 71 million passengers passing through each year. The IGB project began during the Asian financial crisis in the late 1990s when the Korean government was developing Incheon City and its associated traffic network and infrastructure, which was intended to establish the foundation for reinvigorating Korea’s economy and accelerating its recovery from the financial crisis.

Approach

Macquarie Korea Infrastructure Fund (MKIF) managed by Macquarie Asset Management (MAM) and listed on the Korea Exchange, contributed to the Project in 2006 in the capacity of an investor of senior debt, subordinated debt and equity alongside with AMEC Investment Limited (AMEC) an international project management firm. 

The project involved a 4-year construction period with a 30-year concession right to successfully operate the facility.

In 2017, MKIF acquired an additional 23 per cent equity stake previously owned by AMEC and became the controlling shareholder of the Project with the largest shareholding composition. MKIF currently holds 64 per cent of equity and 81 per cent of the subordinated debt of the Project. MKIF’s commitment to the Project is KRW 299 billion as of March 2020.

Outcome

Over the past 10+ years, the Project has successfully met a vital infrastructure need in Korea, actively contributing to the country’s economic growth to become one of the major economic and logistics hubs in North East Asia.

Today IGB provides ~60k daily users with direct travel access to Yeongjong Island and to Incheon International Airport. Moreover, MAM’s deep expertise and capability in the infrastructure sector has given shareholders of, and lenders to, the Project a clear strategy for operational stability, sustainable growth, and financial profitability.

“We are proud to be part of the success story of Korea’s Incheon Grand Bridge and the economic expansion it has fuelled for the country. As the bridge to provide mainland Korea with direct access to Incheon International Airport, this vital piece of infrastructure symbolises the expansion of Korea’s economic growth and improved connectivity to the world. In addition to its role accelerating Korea’s globalisation, the bridge has also offered investors a range of alternative investment opportunities for the past 20 years.”

Jason Suh, Head of Macquarie Korea Asset Management Limited

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