Istanbul, May 17, 2006—The International
Finance Corporation, the private sector arm of the World Bank Group, and
the European Bank for Reconstruction and Development have agreed to provide
parallel loan financing of $27 million each to TAV Urban Georgia LLC, a
subsidiary of TAV Airports Holding. The signing ceremony for the $54 million
financing took place today at the Ciragan Palace in Istanbul, Turkey.
Executives from TAV Airports Holding’s Board of Directors, IFC, and EBRD
were in attendance.
Tav Georgia holds an 11.5-year concession from the Tbilisi International
Airport Joint Stock Company to design, finance, construct, and operate
the Tbilisi International Airport. TAV Georgia has the option to extend
the concession period for an additional five years by designing and constructing
the upgrade of (but not operating) the Batumi International Airport.
Located 20 kilometers from the capital city, Tbilisi International Airport
is the main airport in Georgia. In 2005 it handled approximately
535,000 passengers, an increase of 33 percent over the previous year. Batumi
International Airport serves the city of Batumi, located approximately
20 kilometers from the Turkish border in southwestern Georgia. Batumi is
a main port on the Black Sea, a transport center for petroleum from Azerbaijan,
and a popular tourist destination. Anticipated increase in both business
and tourist travel to Georgia has created the need for substantial upgrade
and expansion of the airport facilities to allow the airports to operate
at international standards of safety and efficiency, which are essential
for Georgia’s continued economic progress.
TAV Airports Holding with its joint-venture partner Urban, a Turkish construction
company, took over the operations of Tbilisi International Airport in November
2005. Construction of the new terminal in Tbilisi started in January 2006.
A groundbreaking ceremony for construction of the Batumi International
Airport took place in May 2006. Total investment for both projects is expected
to be about $77 million. Planned opening of the new Tbilisi airport terminal
is scheduled for November 2006 and, when completed, is expected to serve
1,500 departing and arriving passengers per hour. The airport will be one
of the largest and most modern airports of the region, with a total indoor
area of 24,000 square meters, an apron of 40,000 square meters, a runway
upgraded to international standards, and 24 new check-in counters, three
new boarding bridges, and modern baggage screening systems.
"Tbilisi International Airport and Batumi International Airport are
of significant importance as an integral part of the country’s transport
and economic infrastructure. By supporting the expansion and modernization
of both airports, IFC's financing for TAV Georgia will help increase capacity
and improve operating efficiency and performance standards in these two
airports that are critical for the growth of business activity and tourism
in the country," said Francisco Tourreilles, director of IFC's Infrastructure
Department. "The financing to TAV Georgia, which is IFC’s first investment
in transport infrastructure in Georgia, allows IFC to support economic
growth and the development of public-private partnerships in the country,"
noted Edward Nassim, IFC's director for Central and Eastern Europe. “The
project is a clear example of the role Turkish companies are playing in
intraregional investments, which contribute significantly to the region’s
development,” said Shahbaz Mavaddat, IFC’s director for Southern Europe
and Central Asia.
“Being among the few companies in the world which specialize in both construction
and operation of airport terminals and also known for its high quality
standards, TAV has a remarkable project finance history with banks such
as Hypo und Vereinsbank AG and the World Bank. We are proud to say that
one of the most important factors underlying these loans is our accumulated
know-how in the sector. We believe that the support shown by IFC and EBRD
to our company is an indicator of their trust in Turkey and the dynamic
Turkish private sector.” said Sani ªener, President and CEO of TAV Airports
“This is the first of two build-operate-transfer projects in the airport
sector in the region that the EBRD is expected to sign in the first half
of 2006. Today’s event is significant, given that this is the first BOT
project to be undertaken in Georgia,” said Riccardo Puliti, director of
the EBRD’s Transport Team. “It paves the way for further investments
of this type in Georgia and the wider region, with positive implications
both for economic growth and for development. The signing of the
loan agreement today raises total EBRD committment in Georgia to $450 million.”
TAV Airports Holding has acquired recognition in a short period of time
among international finance circles with its know-how and success in national
and international projects. TAV is controlled by the Tepe and Akfen Groups
and specializes in airport financing, design, construction, and operations.
TAV currently operates Istanbul Ataturk Airport, Turkey’s main gateway
to the world and, once construction is completed in 2006, will start operating
Izmir Adnan Menderes and Ankara Esenboga International Airports. The construction
and operation of the Tbilisi International Airport in Georgia represents
the last in a series of international investments by TAV, which also include
the construction of the Batumi International Airport terminal building
in Georgia, Cairo International Airport terminal building in Egypt, and
Doha International Airport terminal building in Qatar.
TAV was the first Turkish company to receive Project International
magazine’s EMEA prize for the most successful financing project of the
year in Africa, Europe, and the Middle East, an award also known as the
“Financing Oscar.” Project Finance is a publication of EuroMoney,
one of the leading finance magazines of the world. TAV was also given the
Engineering Award of the year by the American Consultancy Engineering Committee
and was recognized as the “best operator in Europe” by Travel Quality.
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing and transition
countries, helping to reduce poverty and improve people’s lives. IFC finances
private sector investments in the developing world, mobilizes capital in
the international financial markets, helps clients improve social and environmental
sustainability, and provides technical assistance and advice to governments
and businesses. From its founding in 1956 through FY05, IFC has committed
more than $49 billion of its own funds and arranged $24 billion in syndications
for 3,319 companies in 140 developing countries. IFC’s worldwide committed
portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion
held for participants in loan syndications. IFC’s portfolio of investments
in the Europe and Central Asia region currently stands at $5.7 billion,
of which approximately $1.2 billion is invested in Turkey across diverse
sectors and companies.
The European Bank for Reconstruction and Development (www.ebrd.com)
was established in 1991 when communism was crumbling in central and eastern
Europe and ex-Soviet countries needed support to nurture a new private
sector in a democratic environment. Today the EBRD uses the tools of investment
to help build market economies and democracies in 27 countries from central
Europe to central Asia.
The EBRD is the largest single investor in the region and mobilizes significant
foreign direct investment beyond its own financing. It is owned by 60 countries
and two intergovernmental institutions. The mandate of the EBRD stipulates
that it must only work in countries that are committed to democratic principles.
It provides project financing for banks, industries, and businesses, both
new ventures and investments in existing companies. It also works with
publicly owned companies to support privatization, restructuring of state-owned
firms, and improvement of municipal services. The bank uses its close relationship
with governments in the region to promote policies that will bolster the