Six Kentucky-based banks have joined forces to launch a $150 million infrastructure fund to support public-private partnership projects, in which state and local governments can partner with private companies to finance and build large projects that might otherwise not be possible.
A press release Tuesday announced the creation of the Commonwealth Infrastructure Fund, led by six of the largest community banks in the state: Commonwealth Bank & Trust, Stock Yards Bank & Trust, Central Bank & Trust, Kentucky Bank, Traditional Bank and United Bank & Capital Trust. The fund was described as “an innovative, private fund established to provide debt financing to private-sector firms participating in public infrastructure projects at both the state and local levels.”
The Commonwealth Infrastructure Fund will be managed by John Farris, founder of Commonwealth Economics LLC and the chairman of the Kentucky Retirement Systems board of directors. In the press release, Farris hailed the Kentucky General Assembly for finally passing legislation in 2016 that allowed public-private partnerships, also called P3s.
“Although we were one of the last states in the country to pass P3 legislation, we can lead the nation in figuring out new and creative ways to finance critical infrastructure projects,” stated Farris. “I am pleased that these six, exemplary Kentucky banks have made this commitment to improving Kentucky infrastructure.”
The release went on to state that the fund will provide debt financing at a time when it is “critically needed at both the state and local levels for projects such as the repair and replacement of roads and bridges, water and sewer systems, and social infrastructure projects such as student housing, treatment centers and charter schools.”
The CEOs of Louisville-based Commonwealth Bank and Stock Yards Bank both hailed the new fund as a difference maker on public infrastructure projects in the state that might not exist if not for such private investment.
“A dedicated fund and funding source, such as the Commonwealth Infrastructure Fund, could mean the difference between developing an infrastructure project in Kentucky and having no project at all,” stated Darrell R. Wells, the CEO and chairman of the holding company for Commonwealth Bank & Trust.
“Our belief is that the $150 million of debt capital dedicated to the Commonwealth Infrastructure Fund will provide the upfront dollars necessary to construct critical infrastructure projects in Kentucky,” stated David Heintzman, CEO and chairman of Stock Yards Bank & Trust.