Medina airport set for financial close by end of June

10 June 2012

The financing is set to be signed around 20 June

A consortium led by Turkey’s TAV Airports Holding Company is planning to reach financial close on the funding for the $1.5bn project to redevelop Medina airport by the end of June.

According to sources close to the deal, the financing is set to be signed around 20 June. Originally, the General Authority for Civil Aviation (Gaca), the government agency behind the project, gave only six months for the group to put funding in place, but an extension has been granted to that deadline.

“It is moving towards financial close. Things have had to be pushed back a bit but the funding will be finalised in June,” says one source close to the project.

Bankers involved in the deal say there are just a few final documentation issues to be finished before the deal can be completed. Medina airport will be funded by local Arab National Bank, SABB, National Commercial Bank – which is also acting as Islamic structuring bank – and Japan’s Sumitomo Mitsui Banking Corporation.

The TAV consortium will operate the airport for the next 25 years and also complete an expansion project to increase capacity from 3.3 million passengers a year to 8 million.

At present, Medina is the only airport PPP project in the kingdom, although sources close to Gaca say that an operations contract for Jeddah airport could be offered to the private sector.

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