Lima airport project financing signs
Sponsors of the the Jorge Chavez International Airport expansion project in Lima, Peru - Fraport (80%) and IFC (20%%) - signed a $450 million bridge loan with four international banks to fund the scheme on 11 September.
Project vehicle Lima Airport Partners (LAP) started negotiations backing in 2018, a year after the original concession contract was amended to include the airport’s expansion. Since then, a series of delay due to corruptions scandals in Peru, litigation involving land rights and problems with EPC contracts have, alternated not only the profile of the project but also the financing. Commercial operation is scheduled for late in 2021.
LAP last year negotiated with Scotiabank a mini-perm at around $140 million, which never closed. Negotiations were halted until the EPC contracts were solved, and the banks were approached again after the Covid-19 pandemic reached peak points in around March or April this year.
The amount raised was increased to $450 million, but closed as a bridge at a 1-year term. It means that the debt for Peru’s flagship project will need to be refinanced in 2021. It was enough to avoid further delays in the construction.
The debt was provided by SMBC (financial adviser); BBVA; Scotiabank; and KfW IPEX-Bank. Milbank provided legal counsel to the lenders while Paul Hastings acted for the borrower.
