Greek Airports

completed

As part of the national privatization program and in order to modernize 14 regional airports, the Hellenic Republic in 2013 launched a tender for two clusters of seven airports each, Cluster A and Cluster B, through the Hellenic Republic Asset Development Fund S.A. (HRADF). In 2014, the concessions were awarded to Fraport Regional Airports of Greece A S.A. and Fraport Regional Airports of Greece B S.A. (collectively “Fraport Greece”). The shareholders of Fraport Greece are Fraport AG Frankfurt Airport Services Worldwide (“Fraport”) and Slentel Ltd. On 14 December 2015, the concession agreements were signed with HRADF and the Hellenic Republic.The Project consists of the privatization, upgrade, maintenance, management and operation of the seven Greek regional airports of Cluster A, under a 40 year concession (the “Project”). The Cluster A Project comprises the airports of Thessaloniki, Kerkyra (Corfu), Chania (Crete), Kefalonia, Zakynthos, Aktion and Kavala. The airports service some of the most popular tourist destinations in the country.The proposed IFC investment consists of an A Loan of up to €105 million for IFC’s own account and potentially the provision of interest rate swaps.Fraport Greece is expected to undertake a range of works on the 14 airports (Cluster A and Cluster B) over the period of the concessions. According to the concession agreements (CA), the works across the airports are divided into:i) Imminent works (including refurbishment and expansion works) to be completed within the first period (i.e. four years) of the concession, to be performed within the concession perimeter. Majority of the works will include, but not limited to: terminal refurbishment and expansion, rebuilding of rescue and firefighting (RFF) building, new landside configurations and new aprons.  ii) Future works, anticipated to occur from 2026 to 2056.Prior imminent works, a small number of works will enable ‘quick wins’ via a ‘small work funds’ at the disposal of airport managers at Concession Commencement Date (CCD) to meet the most immediate requirements. Under current plans, no airport’s overall layout will increase its physical footprint to accommodate expansion or modernization.  Fraport is an existing IFC client with two projects in IFC’s portfolio: Pulkovo in Russia (invested in February 2012) and Lima in Peru (invested in May 2008).   Their commitment to, and demonstration of, appropriate E&S risk management has been high.