New Gbessia airport concessionaire looking at DFI debt

Aeroports de Paris (ADP), Africa50, and the Guinean government have signed a new 25-year concession for the upgrade of Gbessia International Airport in Conakry, Guinea.

ADP has been the airport operator since 1989 and previously had French development agency AFD as the third equity partner on the project. A new concessionaire – Societe de Gestion de l’Aeroport de Gbessia (SOGEAG) – was formed on 3 February 2020, in which ADP and Africa50 (replacing AFD) each own 33%, while the Guinean government holds 34%.

Phase 1 of the improvements will have a capex of €120-150 million and will include a new terminal for domestic and international flights, a cargo terminal, aprons, and taxiways. Africa50 confirms that project debt for the scheme will be around €60-80 million, accounting for roughly half the project cost. Development banks are expected to play a significant part in the financing which will be backed by a standard MIGA guarantee.

The new terminal will have an annual capacity of 1 million passengers and will double the airport’s current capacity of 550,000 passengers by 2031, with a 5% annual increase in passenger numbers anticipated by 2035.

ADP will provide technical expertise, while Africa50 will bring project finance knowledge to the table, serving as a link between the Guinean government and investors. While Africa50 is an independent institution, it is jointly owned by the African Development Bank (AfDB), the Central Bank of West African States (BCEAO), Bank Al-Maghrib, and the governments of 28 African countries. The AfDB also provides support to Africa50 as a major shareholder. As a result, Africa50’s involvement means that there will be no external financial adviser on the project. Orrick is legal adviser to the sponsor.

Africa50 cites several reasons for its participation in the project. Guinea is a shareholder country in Africa50, “therefore, in line with our mandate, we support its economic development agenda,” says an Africa50 spokesperson. “In addition to investing equity, Africa50 plays an honest broker role to ensure alignment between private and public parties and making sure the transaction is balanced.

“Transport is a key sector for us, which we view as even more critical now given the coming into force of the African Continental Free Trade Area (AfCFTA). Airports are bankable projects and investment assets that present opportunities for attractive returns while also assuring important socio-economic development impact.”