Regional development financial institution Asian Development Bank (ADB) has approved a $75 million loan to GMR Infrastructure Ltd for the expansion and renovation of Mactan Cebu Airport in Philippines, as per a disclosure on Tuesday.
The overall project will cost $750 million (Php 33 billion) with ADB as part of the larger consortium of six other banks, providing 70 per cent of its total cost. This includes $450 million (Php 20 billion) from a BDO Unibank, Inc, Bank of the Philippine Islands, Development Bank of the Philippines, Land Bank of the Philippines, Metropolitan Bank & Trust Company and Philippine National Bank.
GMR-Megawide Cebu Airport Corporation (GMCAC) is a 40:60 joint venture between GMR Infrastructure Ltd and Megawide Construction Corporation.
The partners won the contract to renovate and expand the existing airport around a year ago and last month said they have reached a deal for financial closure. It had not named ADB back then as one of the financiers.
The project will boost passenger traffic, support inclusive growth, and mark the first large scale public-private partnership (PPP) project awarded by the government in the Southeast Asian country. Mactan Cebu Airport was opened in the 1960s to serve up to 4.5 million passengers a year but in 2014 it served over 7 million.
“ADB’s involvement demonstrates its commitment to assist the government in developing critical infrastructure, the lack of which has been hampering new investments in the country,” said Christine Genalin Uy, investment specialist in ADB’s private sector operations department.
The project will include the construction of a new passenger terminal and renovation of the existing one, as well as providing new commercial facilities. Passenger capacity post the project completion is expected to reach 12.5 million a year. The project will be developed under a 25-year concession agreement for the operation of both terminals and commercial outlets.
Manila-based ADB is a regional development bank established to promote economic and social development in Asian and Pacific countries through loans and technical assistance.
Recently, it provided $200 million unsecured loan to India’s fifth-largest private sector lender Yes Bank Ltd.
(Edited by Joby Puthuparampil Johnson)