Project financing wrapped up at P23.3B
The Asian Development Bank (ADB) has approved a $75-million (P3.3 billion) loan for the expansion and renovation of Mactan-Cebu International Airport to boost passenger traffic, support inclusive growth, and mark the first large-scale public-private partnership (PPP) project awarded by the government.
Financing for the project also includes debt of P20 billion or about $450 million from a consortium of Philippine banks made up of 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.
“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 at ADB’s Private Sector Operations Department.
She added, “The project will increase tourism and support industry and agricultural activity, thus creating employment opportunities in the province of Cebu and its neighboring provinces.”
Cebu is among the fastest-growing regions in the Philippines and a major contributor to the country’s economy. It is the gateway to the Visayas islands, but the existing airport at Mactan can no longer cope with the surge in passenger numbers.
Mactan-Cebu International Airport, which opened in the 1960s, was designed to serve up to 4.5 million passengers a year but in 2014 it served over 7 million.
The project—which aims to deliver high-quality airport terminal operations in line with international standards—will include the construction of a new passenger terminal and renovation of the existing one, as well as providing new commercial facilities.
Passenger capacities at the new terminal and the upgraded one are 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.
The loan from ADB and co-financing from the consortium of private banks will be provided to GMR Megawide Cebu Airport Corp., a consortium comprised of India’s GMR Infrastructure Ltd. and Philippine construction firm Megawide Construction Corp., which won the bidding for the expansion and upgrade of the airport.
India’s GMR Infrastructure is the fourth largest private airport operator in the world, while Megawide Construction is recognized as a local leader in the use of cutting edge construction technology.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region.
In a disclosure to the Philippine Stock Exchange (PSE) on Wednesday,
GMR Megawide said, “In connection with our previous disclosure dated December 18, 2014 on the signing of an Omnibus Loan and Security Agreement (OLSA), the OLSA was amended to include Asian Development Bank as lender.
“Concessionaire GMR Megawide Cebu Airport Corporation entered into an Amended and Restated OLSA with BDO Unibank, Inc., Asian Development Bank, Bank of the Philippine Islands, Land Bank of the Philippines, Metropolitan Bank & Trust Company, Philippine National Bank and Development Bank of the Philippines with Megawide Construction Corporation, GMR Infrastructure Limited and GMR Infrastructure (Singapore) Pte. Limited as Sponsors and Pledgors, BDO Capital & Investment Corporation as Lead Arranger, and BDO Unibank Inc.—Trust and Investments Group as Onshore Facility Agent, Security Trustee and Inter-creditor Agent.
“This is also in connection with our previous disclosure dated April 22, 2014 on the Mactan-Cebu International Airport Project,” it said.