AIRPORTS: European Investment Bank Approves €120 Million for Zagreb Airport Expansion

After media confirmation, Transportation Minister Sinisa Hajdas Doncic (SDP) confirmed that the European Investment Bank has agreed on financing the Zagreb airport expansion project for €120 million.  The financing is expected to complete the financing for the project for the French-led concessionaire – Zagreb Airport International Company Limited (ZAIC).

According to the 30-year concession signed between the government and ZAIC in April 2012, ZAIC was required to ensure project financing by 11 April 2013, in order for the government to transfer the airport management to ZAIC and for the beginning of the new terminal construction, which is expected in Q3/Q4 2013 with a 3-year completion deadline.

ZAIC is a French-Croatian construction and management consortium comprised of Aeroports de Paris Management, Bouygues Batiment International and the Croatian construction company Viadukt.  The 30-year concession is for the management of the Zagreb Airport and the financing, design and construction of a new passenger terminal, replacing the existing terminal.  TAV, the management company of the Istanbul airport, and Croatia Osiguranje, state-owned largest insurance group in Croatia, are investors into the ZAIC consortium in Q4 2012 Along with the construction of a new terminal, the concession contract includes the management of the current Zagreb Airport operations, including runways, current passenger terminal, cargo terminal, parking lots, and future property development.  The total value of the investment is approximately €324 million, with €236 million for the design and construction of the new terminal and €88 million for the operation of all airport infrastructure during the period of the concession.  The total value for the 30-year concession is €1.94 billion.

The estimates for the new terminal range from 3 to 5 million travellers, including significant increase in cargo traffic, making the future Zagreb Airport into a regional transportation hub.  The project is a strategic infrastructure and transportation project for the Zagreb, Croatia, Southeast Europe, and Europe, in general, as a regional hub and gateway to the region for both travellers and cargo.  The project further develops the European transportation corridors V and X.

Reports state that issues for the delay of the project include: financing difficulties by ZAIC, land ownership issues, project documentation and permitting issues, terminal design issues.  It is critical that these issues are addressed, so that they do not pose any further delays in the project, which means that the management transfer of the Zagreb airport to ZAIC in April/May is important to maintaining the construction plan for the project. (BJ/DV)

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