Transurban details $21b I-24 Choice Lanes payment schedule and revenue share
Transurban noted the Tennessee Department of Transportation (TDOT) announcement of commercial close of the I-24 Choice Lanes Project in Nashville, Tennessee, reached between TDOT and the DriveTN Consortium (DriveTN). The company then set out the payment schedule and revenue share for the I-24 Southeast Choice Lanes concession.
All currency amounts are in US dollars. The $21b is the present value of all payments to TDOT, the same value as at offer.
The $24.8b figure published at award combined present-value and nominal components, as the RFP required. On a consistent present-value basis, it equals $21b.
That clarification gives investors a like-for-like basis to assess the cost of the concession.
The gearing and capital structure will be finalised by financial close. Transurban’s equity share is expected to be funded using existing balance sheet capacity over time.
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How the TDOT payments are structured
Construction period payments
Payments during construction, 2027 to 2033 (nominal), total approximately $7.7b, or about $1.1b a year at peak.
On a present-value basis, the construction period profile is:
- 2027: $1.50b
- 2028: $0.99b
- 2029: $0.94b
- 2030: $0.90b
- 2031: $0.85b
- 2032: $0.81b
- 2033: $0.77b
The schedule shows no payments for 2034 and 2035. Payments are weighted to the early years, which makes the funding approach relevant.
Operating period payments
Operating period payments are set out below on a present-value basis, alongside the construction years.
| Period | Phase | Present value ($b) |
|---|---|---|
| 2027 | Construction | **1.50** |
| 2028 | Construction | **0.99** |
| 2029 | Construction | **0.94** |
| 2030 | Construction | **0.90** |
| 2031 | Construction | **0.85** |
| 2032 | Construction | **0.81** |
| 2033 | Construction | **0.77** |
| 2034 | Construction | n/a |
| 2035 | Construction | n/a |
| 2036 to 2040 | Operating | **0.47** |
| 2041 to 2045 | Operating | **0.59** |
| 2046 to 2055 | Operating | **1.53** |
| 2056 to 2065 | Operating | **2.34** |
| 2066 to 2075 | Operating | **3.72** |
| 2076 to 2085 | Operating | **5.63** |
| Total payments to TDOT | n/a | **21.0** |
The present values are based on the following:
- Present values are as of 12 July 2027 (official deadline to financial close).
- The blended discount rate is 5.2%.
- Consistent with the Concession Agreement signed 30 September 2026, $0.5b of operating period payments, which sit outside the investment-grade rating, are discounted at 8%.
- All other payments are investment-grade rated and discounted at rates from 5% to 5.5% according to payment priority.
All payments are subject to the amounts available at Financial Close, and the financial structure requires an investment-grade rating.
Revenue share mechanism explained
Revenue sharing is not included in the $21b. It applies only if the concession outperforms the base case.
Internal rate of return (IRR) is the annual return an investment generates over its life. The maximum leverage (debt/equity) under the TIFIA term sheet is 75/25, and compliance was a procurement requirement.
Excess revenue share bands
Sharing begins when accumulated revenues exceed the base-case level. Beyond that threshold, TDOT’s share rises in successive bands of 200 bps of additional IRR.
| IRR above base case | TDOT share (%) |
|---|---|
| First 200 bps | **12.5** |
| Next 200 bps | **25.0** |
| Next 200 bps | **50.0** |
| Beyond 600 bps | **75.0** |
Rate sharing threshold
Toll revenue from any per-mile toll above $3.20 (2025 dollars) is shared with TDOT. TDOT’s share rises at each $1.60 step above that threshold.
| Toll rate threshold | TDOT share (%) |
|---|---|
| Up to $3.20 | n/a |
| $3.20 to $4.80 | **50.0** |
| $4.80 to $6.40 | **75.0** |
| Above $6.40 | **90.0** |
Because both mechanisms apply only above the base case or above the toll threshold, they sit outside the $21b and come into play in outperformance scenarios.
What happens next for Transurban’s I-24 project
Two dated items follow from the schedule:
- Financial Close: the official deadline is 12 July 2027, the present-value date in the schedule. Final payment amounts are subject to the amounts available at Financial Close, and the gearing and capital structure will be finalised by then.
- Construction period payments to TDOT: these begin in 2027, per the payment schedule.
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