Macquarie Korea Infrastructure Fund

Baekyang Tunnel


Baekyang Tunnel

Inner City tunnel connecting central business district to northwestern region of Busan, the second largest city in Korea.

Asset overview

Baekyang Tunnel is a 2.3 km dual two-lane toll tunnel that runs underneath Baekyang Mountain in Busan, providing a link from the central business district to Busan port and the northwestern residential areas, including Kimhae International Airport. The tunnel is an important part of the major expressway routes connecting Busan port to the northwestern residential regions of Busan, such as Namhae Expressway, Yangsan-Soba Expressway, and New Daegu-Busan Expressway. Construction of the Baekyang Tunnel began in July 1993 and was completed in January 1998. The tunnel began operation in January 2000.

Investment details

MKIF has invested in Baekyang Tunnel Ltd. (“BYTL”), the concessionaire of Baekyang Tunnel. As of the record date, MKIF is a 100.0% shareholder of BYTL, and MKIF’s total investment amount is KRW 2.2 billion (equity KRW 1.2 billion and senior loan KRW 1.0 billion).

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Concession agreement  
Government authority Busan Metropolitan City
Concession term 25 years
Guarantee duration 25 years
Concession term commencement January 2000
Minimum Guarantee 90% of annual CA projected revenue
Revenue Cap 110% of annual CA projected revenue
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Length 2.3 km
Capacity Dual two-lane in both directions

Asset location