Yesterday brought another indication the Irish economy is recovering with the signing of a public-private partnership (PPP) to construct the new N17/N18 carriageway between Gort and Tuam in Co Galway.

French banks Natixis and Société Générale have agreed to fund €120 million of the €300 million of debt required for the project, marking the first time since the economy crashed in 2008 that overseas commercial banks have been prepared to fund a PPP in Ireland. It is understood that Natixis is providing the bulk of this sum.

The lack of financial support from abroad culminated in Ireland being locked out of international capital markets in 2010, and having to rely on a bailout from the EU and the International Monetary Fund to pay the bills.

The two French banks are part of a consortium that also includes Bank of Ireland and the European Investment Bank(EIB), both of whom kept lending for public projects in recent years. In this case it is understood that Bank of Ireland is providing a chunky €30 million for this 57km road project.

It will be built and operated by a group of leading Irish contractors – John Sisk, Roadbridge and Lagan – alongside Strabag, a major Austrian contractor. Some 450 jobs will be created.

Donal Murphy, director of project finance at Bank of Ireland corporate banking, reminded Cantillon yesterday that it has provided more than €500 million in funding for various infrastructure projects in Ireland since 2008.

“This transaction is an important milestone for the Irish infrastructure market in that it demonstrates that privately-financed projects can continue to be delivered,” Murphy said. “Of real significance is the presence of two major European banks alongside ourselves and the EIB.”

In Murphy’s view this bodes well for the financing of upcoming PPPs across the roads, schools, healthcare and justice sectors. Here’s hoping he’s right, and that the recovery in the economy continues to accelerate.