Work on the $1.5bn expansion of Medina International airport will start once the contracting consortium and the banks reach financial close.

Sources close to the project expect it to take between six and nine months to reach financial close. Some of the banks thought to be involved include the local National Commercial Bank (NCB), local Arab National Bank, Saudi British Bank, Japan’s Sumitomo Mitsui Banking Corporation Europe and potentially the Islamic Development Bank. Construction is expected to start once the financing is in place.

The contract for the expansion of Medina airport was officially signed and awarded on 29 October.  A Turkish-led consortium won the contract for the $1.5bn expansion of Medina airport on a public-private partnership (PPP) basis in August (MEED 8:8:11).

The consortium is led by TAV Airports Holding Company and also includes local Saudi Oger and local Al-Rajhi Holding Group.

The development of Medina airport is significant, as it is the first airport to be carried using a PPP model in the Gulf. TAV, Saudi Oger and Al-Rajhi will design, finance, build and operate Medina airport for a concession period of 25 years.

Phase one of the expansion will take place from 2011 to 2014. It will involve building a new terminal, extending the existing runway and building an apron and taxiway. This will increase capacity at the airport to 8 million passengers a year from the current 4 million.

Phase two of the expansion will take place between 2021 and 2024, and will involve the possible construction of a new runway. Phase two will be executed according to demand and will further increase capacity to 14 million passengers a year. The execution of phase two could drive up the cost of the expansion to $2.4bn. The International Finance Corporation (IFC), part of the Washington-headquartered World Bank Group, is acting a lead adviser on the project.