In a major boost to regional infrastructure, Assured Guaranty (Europe) SA (AGE), a subsidiary of the Bermudian financial powerhouse Assured Guaranty Ltd., has stepped in to guarantee a substantial project financing loan worth EUR 96 million (approximately US$ 108 million).

This strategic move will underpin critical upgrades to the A-127 regional highway in the autonomous community of Aragón, located in north-eastern Spain.

The 23-year fixed-rate facility, bearing a 3.65% coupon, represents a long-term commitment to regional development and enhanced mobility. Bankinter S.A., Kutxabank S.A., and Unicaja Banco S.A. have jointly issued the loan, while Bondholders S.L. assumes the role of security agent and trustee for the financial guarantee. The transaction marks another confident stride by Assured Guaranty in the European project finance landscape.

The lion’s share of the funds will be funnelled into two vital segments of the A-127:

Widening a 24-kilometre section between Tauste and Ejea de los Caballeros

Completely rebuilding a 14-kilometre stretch between Tauste and Gallur

Together, these improvements are expected to bolster road safety, reduce travel times, support economic growth in the region, and futureproof the highway for increased freight and autonomous vehicle readiness. With this project, the A-127 is poised to evolve from a dated provincial connector into a modern, high-capacity thoroughfare capable of handling tomorrow’s transport demands.

The A-127, while perhaps not a household name, plays a significant role in Spain’s secondary road network. Stretching through the agricultural heartland of Aragón, this corridor serves as a critical conduit between Zaragoza and smaller towns like Ejea de los Caballeros and Tauste. The road facilitates not only passenger traffic but also the transport of agricultural goods—a key economic driver in this part of Spain.

The reconstruction of this route is set to enhance intermunicipal connectivity and, just as crucially, improve access to Zaragoza’s wider logistics and commercial ecosystem. This ties in neatly with Spain’s ongoing infrastructure modernisation plan, which prioritises both environmental sustainability and regional cohesion.

Raphael de Tapol, Directeur Général of Assured Guaranty, commented: “This PPP transaction shows the value of our guarantee to major infrastructure sponsors seeking to issue cost-effective long-term debt for essential public sector infrastructure projects. The Aragon A-127 road project, which is part of the Aragon Regional Road Network Investment Plan, stimulates the local economy and provides the region with tangible societal benefits, improved connectivity and enhanced safety. We are proud to guarantee this financing for a project that reflects the best of public-private cooperation in the Spanish market.”

In a nod to the future, planners have ensured the upgraded A-127 will be fully compatible with the requirements of autonomous and connected vehicles. That means:

Integrated road sensors for monitoring traffic flow and conditions in real time

Upgraded road markings and signage optimised for machine vision systems

Reliable mobile network coverage, supporting vehicle-to-infrastructure (V2I) communications

These enhancements aren’t just flashy gimmicks; they’re essential. Autonomous vehicles (AVs) rely on precise, well-maintained infrastructure to safely operate. Roads designed with AVs in mind reduce accidents, support smoother traffic patterns, and lower vehicle emissions by minimising stop-start congestion.

According to a 2023 report by the European Commission, intelligent road infrastructure is expected to play a critical role in achieving net-zero transport emissions by 2050. This puts projects like the A-127 upgrade squarely at the intersection of transport safety and climate resilience.

The financing of this project follows a familiar but robust public-private model. While the construction risk lies with the private sector, Assured Guaranty’s financial guarantee provides bondholders with security and confidence.

Key Parties:

This layered approach spreads risk, enhances investor appeal, and leverages deep expertise across the legal and financial spectrum.

Assured Guaranty isn’t a stranger to large-scale transport infrastructure. With a strong track record of underwriting municipal and structured financings across Europe and North America, AGE’s involvement lends both credibility and rigour to the deal.

Raul Serrano, Managing Director, Infrastructure Finance of Assured Guaranty, commented: “The successful close of this project marks a significant milestone, not only for AGE, but also for the broader banking and investment sector in Spain. It demonstrates the value of our financial guarantee for lenders. We are especially pleased to have worked alongside these three banks and look forward to opportunities to work together in the future.”

Their investment-grade rating also reassures lenders and pension funds alike, making this type of infrastructure bond a popular choice for conservative portfolios.

Construction activities are slated to begin in the second half of 2025, following final environmental and engineering approvals. The concession will run for 25 years under a design-build-finance-operate-maintain (DBFOM) contract. Local construction firms are expected to be heavily involved, spurring job creation in the region.

To mitigate environmental impacts, the project includes the planting of native vegetation along reconstructed verges, modern drainage solutions to prevent flooding, and noise-reducing asphalt mixes. In short, it won’t just be bigger; it’ll be smarter and greener too.

For the province of Zaragoza and the broader Aragón region, the road upgrade represents a transformative step.

Here’s what locals can expect:

Improved traffic safety, reducing accident rates along historically dangerous curves and narrow sections

Boosted local economies through better freight access to Zaragoza and international logistics corridors

Job creation, both during construction and ongoing maintenance phases

The A-127 also forms part of Spain’s effort to reverse rural depopulation. With better transport links, smaller towns become more attractive for families and businesses, injecting new life into ageing communities.

Across Europe, regional roads are finally stepping into the spotlight. After decades of underinvestment, the EU and its member states are acknowledging the strategic importance of sub-national transport links.

According to the European Investment Bank (EIB), regional infrastructure upgrades can deliver up to a 2.5x return on investment over 30 years when measured through productivity gains and economic output.

Spain, in particular, has embraced the idea of balanced development—investing in secondary routes like the A-127 to ensure no region is left behind. As climate adaptation and digital transformation take centre stage, these roads are becoming testbeds for smart mobility solutions.

The A-127 project is more than just tarmac and concrete; it’s a blueprint for sustainable, forward-thinking infrastructure. By weaving together safety, technology, environmental sensitivity, and regional development, it stands as a model for other regions seeking similar transformation.

With a rock-solid financial foundation, thanks to Assured Guaranty’s backing, and a comprehensive development plan, this project proves that infrastructure done right is still one of the best bets for long-term prosperity.