Armenia International Airport Phase II

complete

This project follows on from the successful completion, in May 2007, of the first phase of the Passenger Terminal (presently housing Arrivals), for which the Bank provided a USD 20 million loan together with DEG who provided a parallel USD 10 million loan. This proposed project involves the construction and purchase of equipment for the second phase of the Passenger Terminal complex at Zvartnots International Airport, Armenia and will facilitate the completion of Airport Terminal development reallocating all operations (arrivals and departures) from the old Airport building. This will increase significantly the speed and comfort of passenger processing at Zvartnots whilst also providing a wider scope of services, such as retail activities and car parking operations. The implementation of the Project is a source for transition impact through private ownership support in the sector, demonstration effect in the Caucasus region, transfer of know-how and increase of competition in regional air transportation. The Project will extend the Bank’s support to the final phase of the airport terminal development at Zvartnots, financed and operated by a private sector airport manager. With expansion of the terminal space and the activities, the concessionaire will be able to expand its commercial practices to cover a wider scope of non aeronautical services. With the continuous growth of its airport operations, the transfer of skill and know-how to the airport staff will continue with adoption of the latest airport operations policies, passenger screening and security arrangements. The on-going dialogue with the Government of Armenia in relation to the changes and amendments to the airport’s Master Plan as well as the financial contractual arrangements under the concession agreement continue to strengthen the frameworks for markets in the country with the Government, as represented by the General Aviation Directorate, adopting more commercial working and supervision methods to be able to monitor and evaluate the operations of the Manager. Armenian International Airports CJSC (the “Concessionaire”), a closed joint stock company incorporated in Armenia and controlled by American International Airports LLC (the “Sponsor”). The Concessionaire has obtained a 30-year concession to manage the operations at the Zvartnots Airport, Yerevan. USD million equivalent senior loan; parallel financing to be provided by DEG and ADB. USD 173.0 million Environmental impacts associated with the construction of a new phase to the airport terminal building, related road access and parking are mainly positive. No runway extension is planned. Any adverse impacts can be readily identified, assessed and mitigated. For the above reasons, the project was classified B/1 requiring an Environmental Analysis and an Environmental Audit. This was undertaken by an independent consultant in September 2008. The environmental investigations showed that the project will result in some environmental improvements and has no significant adverse impacts. The environmental and health and safety situation at Zvartnots International Airport (ZIA) has already significantly improved through upgrades financed by the Bank’s earlier loans in 1994 and 2007 and the implementation of the Environmental Action Plan (EAP) agreed in connection with the previous loans. The Bank’s independent consultants observed well organised housekeeping and secure passenger handling. This will further improve through the implementation of the proposed investment programme and the updated EAP. The 2008 environmental report indicates that there are some actions in the previous EAP which still have not been completed at ZIA and the report proposes the implementation of a separate EAP for Gyumri Shirak Airport. This became part of the concession as an overflow airport for ZIA. A separate EAP has been developed. The Sponsor is committed to implement further environmental improvements needed at the existing facilities as well as measures for mitigating adverse impacts arising from the construction works and operation of the airport. The proposed EAPs include specific measures for fuel storage and handling, waste management, wastewater and storm water purification, soil protection, health and safety and disclosing information to stakeholders. The terminal facilities are accessible for disabled people. The project will be structured to meet international safety and environmental standards of International Civil Aviation Organisation (ICAO) as well as of the European Aviation Safety Agency (EASA). As a result, the project will upgrade environmental, health and safety standards of the airport and help improving the level of service. As part of the concession agreement between the operator and the Government, the Government of Armenia (GoA) is responsible for resettling 566 people (156 families), who live within the boundary of the airport. The GoA agreed that the resettlement would be carried out in line with the IFC Safeguard Policy requirements. There have been delays in implementing this commitment, which was made in 2006, but GOA and the Borrower have now identified a potential site and started the consultation and planning work. The cost of building the new apartment blocks will be covered by the Borrower. As part of the due diligence the status of the resettlement process has been reviewed and a Resettlement Action Plan (RAP) has been developed in compliance with EBRD and ADB's policy requirements. The Banks' social experts are monitoring the implementation of the RAP. A specific monitoring programme has been established to ensure air emissions, wastewater discharges and noise will remain within regulatory limits. The EBRD will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual environmental reports covering: (i) ongoing environmental, health and safety performance; and (ii) the status of implementation of environmental mitigation and improvement measures and the RAP. The EBRD’s representatives may also conduct periodic site supervision visits when deemed appropriate. None. Marcelo Wende, Zvartnots International Airport, 375042 Yerevan, Armenia Tel: +374 10 493000 E-mail: MWende@aa2000.com.ar