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Covage has announced that it has secured a debt financing package of EUR183 million (US$224.83 million) for its fibre-optic network project in the south of France. As reported on this platform, the telecoms company was awarded the contract to design, install, operate, commercialise and finance a Very High Speed (THD - très haut débit) broadband network in the department of Hérault earlier this year.

The estimated total investment of the project is EUR350 million (US$430 million). The network will cover 255,000 homes and businesses.

The non-recourse debt financing has a term of 21.5 years and was structured in the form of a soft-mini-perm loan. It was arranged and subscribed by Natixis and Caisse d'Epargne Languedoc Roussillon (40%), Banque Postale (30%) and Societe Generale Corporate & Investment Banking (30%). 

The loan has an availability period of 5 years, consistent with the development and construction phase of the network. At the end of this drawdown period, the loan will be amortized according to a defined profile and duration to take into account the economic equilibrium of the project and the duration of the PPP contract. 

According to Covage, this is one of the largest financing packages of this type, unprecedented in the fibre-optic network market. Natixis acted as ​financial advisor for the transaction.

Covage aims to install the network in five years. The company will then be responsible for its operation for a further 20 years.

The project is part of France's Very High Speed ​​Plan (Plan France Très Haut Débit), which aims to bring very high-speed broadband service to every home, business and government office in France by 2022. It was launched by the French government's Digital Agency (L'Agence du Numérique) in 2013.