ADB TO PROVIDE $40 MILLION LOAN HELP BUILD A NEW TERMINAL AT ZVARTNOTS INTERNATIONAL AIRPORT
/PanARMENIAN.Net/
30.03.2010 15:09 GMT+04:00
/PanARMENIAN.Net/ The Asian Development Bank (ADB) is providing a
loan of up to $40 million to help build a new terminal at Zvartnots
International Airport in Yerevan, Armenia.
The loan marks ADB’s first private-sector infrastructure investment
in Armenia and the Caucasus region and comes at a critical time for
the Armenian economy. After growing 13.8% in 2007, the country’s
gross domestic product expanded only 6.8% in 2008 and the National
Statistics Office has reported a 14.4% contraction in 2009, the Bank
said in a press release.
"Commercial funding for this and other projects dried up because of
the global financial crisis so this loan is critical in bringing
in much-needed external investment that we hope will increase the
confidence of the international business community in investing in
Armenia," said Philip Erquiaga, Director General of ADB’s Private
Sector Operations Department.
The loan will help fund the $173 million cost of a new two-storey
terminal building to supplement an existing concourse, helping
Zvartnots International Airport to increase the number of destinations
it serves and boost the frequency of flights. By the time the terminal
is operational in 2012, the airport should be able to handle about
3.2 million passengers a year, up from the current 1.8-2.0 million.
Armenia’s estimated 7-million-strong diaspora, which still has strong
social and economic ties with its homeland, is also expected to take
full advantage of the improved air services.
"For a landlocked country, good infrastructure – and civil aviation
in particular – is vital as a means of quickly distributing goods and
services. Faster transport should fuel economic growth and increase
tourism," said Shantanu Chakraborty, Senior Investment Specialist in
ADB’s Private Sector Operations Department.
Armenia has a very limited railway system and the road infrastructure
is in urgent need of fresh investment. As well as this latest loan,
ADB has also provided $550 million in loans and technical assistance
to the road sector alone to improve the country’s transportation links.
Zvartnots International Airport, privatized in 2002, is operated by
Armenia International Airports (ArIA) under a 30-year concession
granted by the government. ArIA is a wholly-owned subsidiary of
American International Airports, a New York-based airport holding
company that holds concessions to manage airports in Argentina,
Ecuador and Uruguay.
The floating-rate loan from ADB’s ordinary capital resources
carries a 10.5-year maturity with a grace period of 3.25 years. The
European Bank for Reconstruction and Development and the Deutsche
Investitions-und-Entwicklungsgesellschaft are also providing loans
equivalent to $40 million and $20 million respectively to the project.
ArIA will finance the remainder of the project cost through equity,
subordinated loans and internally generated funds.