€186.73 million long-term financing to Fraport Greece for infrastructure upgrade
Strengthening the integration of the Greek economy and developing the country's important tourism industry, the EBRD – together with a consortium of lenders – is supporting the modernisation of 14 regional airports. The EBRD is providing €186.73 million in long-term funds to Fraport Greece, the holder of a 40-year operating concession for the facilities.
The 14 airports include Aktio, Chania (Crete), Kavala, Kefalonia, Kerkyra (Corfu), Kos, Mitilini, Mykonos, Rhodes, Samos, Santorini, Skiathos, Thessaloniki (Greece’s second largest city) and Zakynthos. Combined, these airports served a total of about 25.2 million passengers in 2016.
Total financing provided by the EBRD, the International Finance Corporation (IFC), the Black Sea Trade and Development Bank (BSTDB), the European Investment Bank (EIB) and Alpha Bank amounts to €968.4 million. €280.4 million will be used for the financing of development works at the 14 airports. The modernisation and upgrading of the airport infrastructure will support the growth of Greece’s regions. The investments will promote the development of the tourism industry, a key driver of the Greek economy.
Meanwhile, the remainder of the loan will be used as part of the upfront concession payment of €1.234 billion to the Hellenic Republic Asset Development Fund (HRADF) paid by Fraport Greece as the concessionaire. Fraport Greece is a joint venture formed by Fraport AG Frankfurt Airport Services Worldwide and its partner Copelouzos Group.
Fraport AG is one of the leading companies in the international airport business, active on four continents through investments and subsidiaries. With Frankfurt Airport its home base, the company operates one of the world's most important air transportation hubs. In total, Fraport employs around 21,000 people worldwide.
Copelouzos Group is a leading Greek industrial conglomerate with a wide range of portfolio activities, with core sectors being energy, airports and real estate.
Phil Bennett, EBRD First Vice President and Head of Client Services Group, said: “We are delighted to participate in this landmark transaction, which we expect to provide a much-needed boost to the Greek economy and to Greece’s regional development. The modernisation of this key infrastructure, supporting tourism in particular, will improve access, exchange and integration. The EBRD is especially pleased to support strategic partners who will bring private funding and expertise to regional airports in Greece and could provide an important model for future infrastructure development projects.”
Integration is one of the six transition qualities the EBRD sees as key elements of well-functioning market economies, with the remaining being competitiveness, inclusion, good-governance, green and resilience. These qualities are implicit in the EBRD’s founding articles.
The EBRD started investing in Greece on a temporary basis in 2015 to support the country’s economic recovery. The Bank’s priorities there include strengthening private companies and the financial sector, support for privatisation, infrastructure development and regional integration of the Greek economy. To date, the EBRD has invested almost €850 million in 17 projects in Greece.