Ferrovial Nears Close on $9.2B Nashville I-24 Choice Lanes Project

Key Points

• Ferrovial has reached commercial close on Nashville’s $9.2 billion I-24 Choice Lanes project and expects financial close before July 2027. The 50-year concession will add two managed lanes in each direction along a 26-mile corridor, with operations targeted for 2034.
• The project aims to address severe congestion on I-24, which carries roughly 150,000–190,000 vehicles daily. Ferrovial expects Nashville’s population and economic growth to support long-term traffic demand and managed-lane adoption.
• Ferrovial holds a 65% consortium stake and is targeting a double-digit equity internal rate of return, while funding its share mainly through operating cash flow and some corporate debt. The company has not yet disclosed detailed equity, debt, payment or revenue assumptions.

Ferrovial NASDAQ: FER said it has reached commercial close for the I-24 Choice Lanes project in the Nashville area and is now working toward financial close, which it expects to complete before the contractual deadline of July 2027.

The Tennessee project is the state’s largest-ever capital investment and its first public-private-partnership transportation project, according to Ferrovial Chief Executive Officer Ignacio Madridejos. The 50-year design, build, finance, operate and maintain concession will add two managed “choice lanes” in each direction along a 26-mile I-24 corridor between Nashville and Murfreesboro, alongside four existing toll-free general-purpose lanes.

Ferrovial estimates construction costs at approximately $9.2 billion. Construction is expected to take eight years, with service commencement anticipated in 2034. The 50-year concession term begins when operations start, Madridejos said, meaning the timing would move if construction finishes earlier or later than anticipated.

Congestion, Growth and Traffic Demand

Madridejos described I-24 as a heavily congested corridor with traffic of roughly 150,000 to 190,000 vehicles a day. The company said weekday congestion lasts approximately eight to 11 hours, with peak-period speeds dropping below 20 mph and delays reaching as much as 36 minutes.

The corridor serves commuters traveling between Nashville and Murfreesboro as well as freight traffic on a route connecting the Southeast with the Midwest. Heavy vehicles represent approximately 12% to 16% of corridor traffic, Ferrovial said. Nashville International Airport, which is accessible via the corridor, handled a record 26.7 million passengers in fiscal 2026, according to the company.

Ferrovial cited Nashville’s demographic and economic expansion as support for long-term traffic demand. The metropolitan area had about 2.2 million residents in 2025 after population growth of roughly 2% annually over the previous decade, the company said. It also cited a 4.6% compound annual growth rate in real GDP over the past 10 years and median household income of about $88,800 in 2025.

The company expects traffic assumptions following the planned 2034 opening to be supported by regional growth, demand currently constrained by congestion and a two- to three-year user-adoption period typical of newly configured managed-lane corridors.

Design and Pricing Structure

Ferrovial said its proposed design increases the number of connected interchanges to 15 from seven in the Tennessee Department of Transportation’s reference design. The company said this raises the share of corridor trips able to access the choice lanes to about 90%, compared with roughly 70% in the reference design.

Madridejos said the outside-lane configuration is intended to improve access while reducing right-of-way needs, community impacts and disruption during construction. Ferrovial said approximately 30% of advanced design work has been completed, which it believes improves engineering visibility and confidence in the construction price.

The lanes will use dynamic tolling, with prices responding to real-time traffic conditions and no maximum toll rate once specified operating triggers are met. The main soft toll cap begins at $1.60 per mile in 2025 values, while a lower $0.80-per-mile cap applies when traffic volumes are below 500 passenger-car equivalents per lane per hour.

Pricing above the soft cap can be triggered at the segment level when traffic exceeds 1,500 passenger-car equivalents per lane per hour or speeds fall below 55 mph. The company said the pricing response may also extend to the preceding road segment. Toll thresholds and revenue-sharing bands will escalate annually by the greater of 2.5% or an index based on Tennessee GDP growth, U.S. consumer inflation and 3%.

• Ferrovial retains 100% of toll revenue up to $3.20 per mile.
• It retains 50% of revenue between $3.20 and $4.80 per mile.
• It retains 25% between $4.80 and $6.40 per mile.
• It retains 10% of revenue above $6.40 per mile, with the balance shared with TDOT.

Heavy vehicles will face toll multipliers ranging from three times for extended vehicles to eight times for large trucks, reflecting their greater use of roadway capacity.

Financing and Capital Allocation

Ferrovial declined to disclose project equity requirements, debt levels, concession-payment details or projected revenue assumptions until financial close, citing confidentiality restrictions. Chief Financial Officer Ernesto López Mozo said the project has investment-grade ratings from multiple agencies and that Ferrovial expects a normal financial close.

Madridejos said Ferrovial holds a 65% stake in the consortium selected as preferred bidder. He said the company is targeting a double-digit equity internal rate of return calibrated for the project’s scale, construction complexity, financing requirements and status as Tennessee’s first transportation P3.

The company said it expects to fund its equity commitments primarily through cash generated by operations and, to a lesser degree, additional corporate debt, while maintaining its BBB rating framework. López Mozo said Ferrovial uses a proxy of roughly two times net debt to EBITDA when monitoring corporate leverage.

Management said it does not expect the I-24 project, or a potential award of the I-285 East project in Atlanta, to require a capital increase. Ferrovial also said it intends to continue pursuing U.S. managed-lane opportunities, including I-285 East and I-77 South, while potential I-24 extensions are not included in the base case or projections.

About Ferrovial (NASDAQ:FER)

Ferrovial SE is a global infrastructure company that develops, finances, operates and maintains transportation and other public infrastructure assets. Its activities include toll roads, managed lanes, airports, energy infrastructure and infrastructure services. The company participates in projects across the United States, Canada, Spain, the United Kingdom, Poland and other international markets.

Ferrovial's highways business focuses on the development and operation of toll roads and express lanes under long-term concession agreements.

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