International Public Partnerships Regulatory News (INPP)

Further investment into Northern Diabolo rail link

23 December 2020

International Public Partnerships Limited ("INPP" or the "Company"), the FTSE 250 listed infrastructure investment company, announces that it has made an additional investment of €10 million and made a contingent commitment of a further €14 million to the 100% indirectly owned special purpose company that owns the Northern Diabolo Rail Link (the "Project" or "Diabolo"). Diabolo is a rail infrastructure investment which integrates Brussels airport with Belgium's national rail network.

The additional €10 million has been invested by the Company to support the Project's liquidity position, ensure its debt covenants will continue to be met, and ultimately protect the value of the Company's investment. The likely need for this commitment has been flagged previously.

As previously advised, Covid-19 has resulted in the number of passengers using the Project being significantly lower over the course of 2020 compared to previous years, and the reinstatement of a national lockdown in Belgium at the end of October 2020 has further impacted passenger numbers. Whilst Diabolo does not operate train services, and part of its revenues are paid on an availability basis, the larger part of its revenues, while paid by the public authorities and not directly by passengers, are nonetheless linked to the numbers of passengers that use either the rail link itself or the wider Belgian rail network.

The Project's operational performance remains excellent. However, without remedial action by the Company, the continued lower than projected passenger numbers would be anticipated to result in a liquidity shortfall and a breach of certain formula-based debt covenants in early 2021. The Company has been aware of this possibility for several months and has been proactively engaged in discussions with the Project's lenders and the Belgian state railway since the onset of Covid-19. Agreement has now been reached to provide this additional funding to mitigate the issues noted above.

The extent to which funding additional to the €10 million investment is required will depend upon the timing of the recovery in passenger numbers. There is naturally a high degree of uncertainty inherent in future passenger projections so, with an intention of prudence, the Company has allowed up to €24 million in total to be made available should the Project require it. To the extent that the full €24 million is not required, unutilised commitments will be cancelled.

Despite the Covid-19 related issues the Project has encountered, the investment remains strategically important for INPP and retains a number of attractive investment characteristics including:

· Historic strong performance with high levels of passenger use;

· A remaining concession term of over 26 years;

· High degree of inflation linkage;

· Providing an essential service for travellers; and

· Supporting the climate-positive modal shift towards the greater use of public transport.

The Company's valuation of the Project was reduced as at 30 June 2020 in recognition of the likely impact of reduced passenger numbers. Further negative adjustments are not currently anticipated to exceed the amounts of additional capital now being committed to the Project but this position will remain under review.

The long term valuation and cashflow impact on the Company is not straightforward to project as, besides the fact that ongoing discussions continue with the Project stakeholders with respect to mitigation, in the longer-term, the Project benefits from a contractual mechanism which permits an adjustment to the future passenger fee should passenger numbers and returns fall below a certain threshold. This mechanism operated successfully earlier in the life of the Project but, subsequently, the higher than forecast passenger use during the period 2013 to 2019 resulted in returns above the threshold at which this mechanism could be invoked. The lower passenger numbers consequent on Covid-19 have not yet rendered this mechanism available. However, this mechanism remains an important downside protection for the remaining term of the concession.

ENDS.

For further information:

Erica Sibree/Amy Joslin +44 (0)20 7939 0558/0587

Amber Fund Management Limited

Hugh Jonathan +44 (0)20 7260 1263

Numis Securities

Ed Berry/Mitch Barltrop +44 (0) 20 3727 1046/1039FTI Consulting

About International Public Partnerships:

INPP is a listed infrastructure investment company that invests in global public infrastructure projects and businesses, which meets societal and environmental needs, both now, and into the future.

INPP is a responsible, long-term investor in 130 infrastructure projects and businesses. The portfolio consists of utility and transmission, transport, education, health, justice and digital infrastructure projects and businesses, in the UK, Europe, Australia and North America. INPP seeks to provide its shareholders with both a long-term yield and capital growth.

Amber Infrastructure Group ('Amber') is the Investment Adviser to INPP and consists of over 130 staff who are responsible for the management of, advice on and origination of infrastructure investments.