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Consortium lends €968m for Greek airport deal

Five lenders, led by Athens-based Alpha Bank and the EIB, will provide financing for Fraport’s €1.2bn acquisition of 14 airports.

A consortium of five lenders including the European Investment Bank and the International Finance Corporation has signed a nearly €1 billion long-term financing for 14 Greek regional airports.

The deal comes 15 months after Fraport Greece, a joint venture of Frankfurt-based Fraport and Athens-based Copelouzos, was awarded a €1.234 billion contract by the Greek government to lease and operate the hubs. The lender consortium will provide €968.4 million to the team for the 40-year concession.

The transaction was led by Alpha Bank and the EIB, which contributed €284.7 million and €280.4 million, respectively. The European Bank for Reconstruction and Development (€186.7 million); the IFC (€154.1 million); and Black Sea Trade and Development Bank (€62.5 million) rounded out the consortium.

Fraport has promised to invest at least €400 million to develop the airports during the first four years of the concession. Of the loan, €280.4 million will go towards financing these improvements, with the rest used as part of the firm’s upfront concession payment to the Hellenic Republic Assets Development Fund, the Greek privatisation agency.

“Together with the equity injected by our shareholders, the proceeds of the loans will help funding the upfront payment and the four-year airport rehabilitation programme,” said Fraport Greece chief executive Alexander Zinell.

Airports included in the deal include those in Thessaloniki, Greece’s second-largest city, as well as tourist hotspots such as Rhodes, Crete, Santorini and Mykonos. In total, they served a combined 25.2 million travellers in 2016. Fraport will inject more than €1 billion into the airports’ infrastructure over the course of the concession.

Pierre Moscovici, European Commissioner for Economic and Financial Affairs, said the financing agreement “succeeds in mobilising private investment to finance upgrades to growth-enabling infrastructure that will support, for example, tourism and mobility”.

Fraport was picked in November 2014 for the airport privatisation, but political complications held up the deal for more than a year. An agreement was finally reached in December 2015 for the German developer to manage, operate, upgrade and maintain the hubs.