Five leading financial institutions have signed a long-term financing agreement with German-Greek consortium Fraport Greece, which will soon be managing, operating, upgrading and maintaining 14 regional Greek airports under a 40-year concession contract.
The agreement is for total financing of 968.4 million euros. The lenders are Alpha Bank (participating with 284.7 million euros), the Black Sea Trade & Development Bank (62.5 million), the European Bank for Reconstruction & Development (186.7 million), the European Investment Bank (280.4 million), and the International Finance Corporation (154.1 million), a member of the World Bank Group.
IFC is also the sole provider of euro interest rate hedging swaps to help Fraport Greece hedge potential fluctuations in interest rates through the term of the loan.
Over two-thirds of the total amount (688 million euros) will be used to cover the upfront payment (of 1.234 billion euros) due to state sell-off fund TAIPED upon the airports’ delivery, while 280.4 million will be used to finance upgrading work at the 14 airports.
Meanwhile, Fraport Greece recently announced a capital increase raising the company’s total capital to 650 million euros, most of which will go toward the upfront payment.
The consortium also announced on Monday that it had reached an agreement with Hellenic Duty Free Shops for the expansion of the retailer’s commercial spaces at the 14 airports from 5,000 square meters to almost 12,000 sq.m., combined with the exclusive retail rights at those terminals.