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IFC Supports Private Investment in Greek Airports to Bolster Tourism Industry

Athens, Greece, March 27, 2017 —IFC, a member of the World Bank Group, is financing the  privatization of 14 Greek regional airports through two long-term loans to Fraport Greece, a joint venture of Fraport AG Frankfurt Airport Services Worldwide and Copelouzos Group. The consortium was recently awarded a 40-year concession to modernize and operate the airports, which are in some of Greece’s best known tourist destinations.
IFC is providing Fraport Greece with a total of €154 million over two 18-year maturity loans. They are part of a nearly €1.0 billion long-term debt package put together by five international and Greek financial institutions. IFC is the only lender providing euro interest rate hedging swaps to help Fraport contend with potential fluctuations in interest rates.
Alexander Zinell, Fraport Greece CEO, said: "The project for the concession of the 14 airports is a bold and ambitious project which aims to develop and modernize the airports’ facilities as well as to implement  a new operating mentality. All the above will result in the increase of passenger traffic and the improvement of the travel experience. This collaboration between Fraport Greece and IFC is the continuation of very successful partnerships Fraport still enjoys with the institution at Lima Airport and St. Petersburg Pulkono Airport. We look forward to continuing our collaboration with IFC in the future.”
The first loan from IFC, worth €92 million, will enable Fraport Greece to implement the upgrade of the infrastructure and services at Thessaloniki, Kerkyra (Corfu), Chania (Crete), Kefalonia, Zakynthos, Aktion, and Kavala airports. The second €62 million loan will favor the company’s plans to the modernize and expand Rhodes, Kos, Samos, Mytilene, Mykonos, Santorini, and Skiathos airports
Tourism is a vital part of the Greek economy, accounting for approximately 16 percent of gross domestic product and nearly 18 percent of jobs. The 14 airports currently serve half of Greece’s international passengers and have reached their capacity limit. Once completed, the upgrades and expansions are expected to almost double the terminal area and raise the number of served passengers by 20 percent. That will allow them to accommodate up to 27.5 million passengers in four years. The upgrades will include expansions, internal renovations, and increased retail and travel services. They will also create significant operational efficiencies for the airports.
Dimitris Tsitsiragos, IFC Vice President, said: “Well-managed airports around the world have proven to serve as economic engines. This landmark concession is an excellent example of how the private sector can step in to support the Greek economy by generating revenues for the government, creating jobs, and boosting confidence in vital sectors. IFC’s involvement in tourism and infrastructure can attract additional investments and encourage new development projects to promote economic growth.”
IFC and Fraport have a long-standing partnership that includes the reconstruction and expansion of St. Petersburg’s Pulkovo airport in 2010 and IFC’s investment in Lima Airport in 2007.
Over the past 10 years, IFC committed over $1.6 billion for the construction, expansion, and modernization of airport infrastructure in over 10 countries. In 2015 alone, this resulted in 15.4 million additional passengers served, 2,605 jobs supported, and $341 million in concessions fees and taxes paid to governments.
IFC’s engagement in Greece is part of a larger effort by the World Bank Group to support economic growth in the country. The World Bank, through the International Bank for Reconstruction and Development, provides advice to the Greek government and IFC supports the private sector through investments. Over the last few years, the World Bank Group has supported Greece in improving social safety nets for the most vulnerable and helped the country to become a more attractive venue for businesses and investors. With the World Bank Group’s help, Greece has already made measureable improvements in its business climate, a big step forward and a strong signal to firms that Greece is open for business.
For more information about Fraport Greece, please visit:
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About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it’s needed most. In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity. For more information, visit .
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