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Project summary document

Project name:Armenia International Airport Phase II
Country:Armenia
Project number:39334
Business sector:Transport
Public/Private:Private
Environmental category:B
Board date:21 April 2009
Status:Passed concept review, Pending final review
Date PSD disclosed:
Date PSD updated:
30 September 2008
Local language translation:Հայերեն թարքմանւթյւն 
Date translation disclosed:3 October 2008
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Project description
and objectives:

This project follows on from the successful completion, in May 2007, of the first phase of the Passenger Terminal (presently housing Arrivals), for which the Bank provided a USD 20 million loan together with DEG who provided a parallel USD 10 million loan.

This proposed project involves the construction and purchase of equipment for the second phase of the Passenger Terminal complex at Zvartnots International Airport, Armenia and will facilitate the completion of Airport Terminal development reallocating all operations (arrivals and departures) from the old Airport building. This will increase significantly the speed and comfort of passenger processing at Zvartnots whilst also providing a wider scope of services, such as retail activities and car parking operations.

Transition impact:

The implementation of the Project is a source for transition impact through private ownership support in the sector, demonstration effect in the Caucasus region, transfer of know-how and increase of competition in regional air transportation.
The Project will extend the Bank’s support to the final phase of the airport terminal development at Zvartnots, financed and operated by a private sector airport manager.

With expansion of the terminal space and the activities, the concessionaire will be able to expand its commercial practices to cover a wider scope of non aeronautical services. With the continuous growth of its airport operations, the transfer of skill and know-how to the airport staff will continue with adoption of the latest airport operations policies, passenger screening and security arrangements.

The on-going dialogue with the Government of Armenia in relation to the changes and amendments to the airport’s Master Plan as well as the financial contractual arrangements under the concession agreement continue to strengthen the frameworks for markets in the country with the Government, as represented by the General Aviation Directorate, adopting more commercial working and supervision methods to be able to monitor and evaluate the operations of the Manager.

The client:

Armenian International Airports CJSC (the “Concessionaire”), a closed joint stock company incorporated in Armenia and controlled by American International Airports LLC (the “Sponsor”). The Concessionaire has obtained a 30-year concession to manage the operations at the Zvartnots Airport, Yerevan.

EBRD finance:

USD 20 million equivalent senior loan; parallel financing to be provided by DEG.

Total project cost:

USD 145.6 million

Environmental impact:

Environmental impacts associated with the construction of a new phase to the airport terminal building, related road access and parking are mainly positive. No runway extension is planned. Any adverse impacts can be readily identified, assessed and mitigated. For the above reasons, the project has been classified B/1 requiring an Environmental Analysis and an Environmental Audit has been conducted by an independent consultant (Environmental Audit Update of Zvartnos and Gyumri Airports, ERM GmbH, September 2008).

The environmental investigations showed that the project will result in some environmental improvements and has no significant adverse impacts. The environmental and health and safety situation at ZIA has already been significantly improved through upgrades financed by the Bank’s earlier loans in 1994 and 2007 and the implementation of the Environmental Action Plan (EAP) agreed in connection with the previous loans. The Bank’s consultants observed well organized housekeeping and secure passenger handling. This will further improve through the implementation of the proposed investment programme and the updated EAP. The 2008 environmental report indicates that there are some actions of the previous EAP which still have not been completed at ZIA and the report proposes the implementation of a separate EAP for Gyumri Shirak Airport, which became part of the concession as an overflow airport for ZIA and its runway use is shared with the Armenian Ministry of Defence.

The Sponsor is committed to implement further environmental improvements needed at the existing facilities as well as measures for mitigating adverse impacts arising from the construction works and operation of the airport. The proposed EAPs include specific measures for fuel storage and handling, waste management, wastewater and storm water purification, soil protection, health and safety and disclosing information to stakeholders. The terminal facilities are accessible for disabled people.

The project will be structured to meet international safety and environmental standards of International Civil Aviation Organisation (ICAO) as well as of the European Aviation Safety Agency (EASA). As a result, the project will upgrade environmental, health and safety standards of the airport and help improving the level of service.

A specific monitoring programme has been established to ensure air emissions, wastewater discharges and noise will remain within regulatory limits. The EBRD will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual environmental reports covering: (i) ongoing environmental, health and safety performance; and (ii) the status of implementation of environmental mitigation and improvement measures. The EBRD’s representatives may also conduct periodic site supervision visits when deemed appropriate.

As part of the concession agreement between the operator and the Government, the Government of Armenia (GoA) is responsible for resettling 566 people (156 families), who live within the boundary of the airport. The GoA agreed that the resettlement would be carried out in line with the IFC Safeguard Policy requirements. There have been delays in implementing this commitment, which was made in 2006, but it now seems that they have identified a potential site and started the consultation and planning work. The cost of building the new houses will be covered by the Borrower. As part of the due diligence the status of the resettlement process has been reviewed and a Resettlement Action Plan (RAP) has been developed in compliance with EBRD Environmental Policy requirements. The Bank’s social experts are monitoring the implementation of the RAP.

Technical
cooperation:

None.

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

Company contact:

Marcelo Wende, Zvartnots International Airport, 375042 Yerevan, Armenia
Tel: +374 10 493000
E-mail: MWende@aa2000.com.ar

EBRD contact:

Agnieszka  Lukasik, Operation Leader: lukasika@ebrd.com

Business opportunities:

For business opportunities or procurement, contact the client company.

General enquiries:

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com


Project Summary Documents are created before consideration by the EBRD Board of Directors. Details of a project may change following disclosure of a Project Summary Document. Project Summary Documents cannot be considered to represent official EBRD policy.
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