Ferrovial projects double-digit returns for Tennessee I-24 project

Ferrovial management has projected double-digit returns on equity for its I-24 express lanes concession in Tennessee, addressing recent market skepticism regarding the project's profitability. This follows a downgrade by UBS analysts, which had previously estimated returns closer to 7% and contributed to a decline in the company's share price.

The 50-year concession involves the design, construction, financing, operation, and maintenance of 26 miles of dynamic toll lanes between Nashville and Murfreesboro. The estimated construction cost is approximately $9.2 billion, with operations expected to begin by 2034 or 2035. Ferrovial holds a 65% stake in the project.

To fund its portion of the project, Ferrovial intends to utilize cash flow from existing operations and corporate debt, rather than seeking capital increases or asset divestments. The company stated that it aims to maintain its BBB credit rating and will use dividends from other U.S. toll operations to support the investment. The financial scheme for the asset is expected to be finalized before July of next year.