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EBRD finances expansion of Turkey's Dalaman airport

By Olga Rosca

New domestic terminal will boost tourism in the Turkish Riviera
The European Bank for Reconstruction and Development (EBRD) is financing the construction and operation of a new domestic terminal at Dalaman airport in the south-western Turkish province of Muğla under a public-private partnership (PPP) scheme.
The Bank is lending €175 million to YDA Havalimani Yapim ve Isletme A.S., a special-purpose vehicle set up by the Turkish construction and infrastructure company YDA Insaat, which was awarded the concession contract last year.
The EBRD financing is composed of a 16-year A-loan of €87.5 million for the Bank’s own account and a 15-year B-loan €87.5 million syndicated to UniCredit Bank Austria.
The funds will be used to build a new energy-efficient and environmentally friendly domestic terminal with auxiliary structures including road access and parking facilities. The project will accommodate the strong growth in domestic and international traffic at Dalaman airport.
With the new terminal, the domestic passenger capacity of Dalaman airport will increase to 10 million from the current 3 million passengers per year, giving a significant boost to the tourism industry.
While Dalaman is a small city of 25,000 people, its airport is a gateway to some of the most popular tourist destinations in Turkey, including Marmaris, Fethiye, Dalyan, Kalkan and Kas. With flights to and from over 120 destinations across Turkey, Europe, North Africa and the Middle East, Dalaman is currently one of the busiest airports serving the Turkish Riviera.
Sue Barrett, EBRD Director for Transport, said: “We are pleased to support greater private-sector participation in transport infrastructure projects which improve people’s lives and strengthen important sectors of the Turkish economy. Dalaman is the first regional airport that the EBRD is financing and we expect other regional airports to be operating under successful PPP schemes in future.”
Both the international and the new domestic terminal will be run by YDA Havalimani Yapim ve Isletme A.S. under a concession agreement until the end of 2040.
Hüseyin Arslan, Chairman of YDA Group, said: “We are very proud of our contribution to the economic development of the region by operating Dalaman Airport. We are making a huge investment worth €1 billion and will transform the airport and the travel experience of passengers. I express my sincere gratitude to the EBRD and Unicredit for their confidence in our Group and in Turkey as we embark on this large-scale investment.”
YDA Group has been operating Dalaman International Airport since 2006. Its experience in the aviation sector also includes the operation of Kazakhstan’s Aktau airport, the construction of Boryspil International Airport in the Ukrainian capital Kiev and the Turkish Airlines Aviation Maintenance and Overhaul Centre at Istanbul’s Sabiha Gökçen Airport, the region’s largest aviation maintenance hub.
The EBRD previously invested in YDA Insaat’s lira-denominated bond issue to support the company’s operations under recently awarded PPP projects in Turkey.
The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. In 2014, Turkey became the Bank’s largest single recipient with new investments worth €1.4 billion. To date, the EBRD has invested over €5 billion in the country across more than 140 projects in infrastructure, energy,
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