IFC invests in Belgrade Airport to boost development of Serbia’s infrastructure
IFC, a member of the World Bank Group, is providing a €182 million financing package to the new private concessionaire of Belgrade Airport Nikola Tesla, VINCI Airports Serbia, a subsidiary of VINCI Airports SAS.
The concessionaire will develop and upgrade Belgrade’s Nikola Tesla Airport, to boost Serbia’s tourism and transport industry and encourage economic growth.
VINCI Airports SAS, one of the largest airport operators in the world and a member of France’s VINCI SA group, was awarded the concession to develop the airport in January, following a competitive public tender. The 25-year contract includes financing the airport’s upgrading, expansion, operation and maintenance and is expected to almost triple its passenger capacity by the end of the concession.
IFC’s financing package comprises a direct €72 million A loan and a €110 million B loan under IFC’s syndication umbrella.
European Bank for Reconstruction and Development (EBRD) is providing the same amounts in A and B loans. IFC, EBRD, Deutsche Investitions- und Entwicklungsgesellschaft (DEG) and Societe de Promotion et de Participation pour la Cooperation Economique SA (Proparco), were lead arrangers on the project. Six commercial banks (Banca IMI, Unicredit, Erste Group, Kommunalkredit, CIC and Societe General) are mobilized to participate in the financing through IFC’s and EBRD’s B loan umbrella.
“We are delighted to support the entry of a global leader in airport operation to Serbia, helping Nikola Tesla Airport reach its full potential for all stakeholders,” said Thomas Lubeck, IFC Regional Manager for Central and Southeast Europe. “This is the first airport concession in the country and we hope it will serve as a model for how the private sector can deliver efficient solutions in infrastructure in the region.”
The financing deal is the latest of a series of IFC investments in emerging market airports, whose upgrades can provide an economic boost including through increased tourism. IFC has committed and mobilized over $2.1 billion for airport projects around the world since 2005.
Cheryl Edleson Hanway, IFC’s Regional Senior Manager for Infrastructure and Natural Resources said: “IFC is pleased to bring its global airport financing expertise to Serbia and to support VINCI as it takes over private operation of the Nikola Tesla Airport. We are hopeful that this flagship transaction serves as a positive regional example of successful private participation in infrastructure that can be replicated in other markets seeking to follow a similar path.”
Total costs for the Belgrade airport project are estimated at €982 million, including an upfront concession fee of €501 million payable to the government of Serbia, and approximately €380 million in capital expenditures and development costs. The upgrades are expected to increase the airport’s capacity to a service level of more than 14 million passengers annually by the end of the concession period in 2043, from 5.3 million in 2017.
The IFC is a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. IFC works with more than 2,000 businesses worldwide, using their capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY2017, IFC delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity.