Public-Private Partnership Workshop

Transcription

1 I s l a m i c D e v e l o p m e n t B a n k 0 Public-Private Partnership Workshop Ministry of Economic Affairs & Finance, Iran July 2010 Together we build a better future

2 I s l a m i c D e v e l o p m e n t B a n k 1 CASE STUDIES - AIRPORT PROJECTS Queen Alia International Airport Project, Hashemite Kingdom of Jordan Hajj Terminal, King Abdulaziz International Airport Project, Kingdom Saudi Arabia

3 I s l a m i c D e v e l o p m e n t B a n k 2 QUEEN ALIA INTERNATIONAL AIRPORT Rehabilitation and enhancement of the existing passenger terminal Construction of a new passenger terminal & new aprons Disposal of the existing terminal once the new one is in operation

4 Project at a Glance Description: To finance, rehabilitate, expand, maintain and operate the Queen Alia International Airport, Jordan under a Rehabilitation, Expansion and Operation Agreement Concession company: Airport International Group P.S.C. ( AIG ) Sponsors: - Aeroport de Paris Management, France, (Operator) 9.5% - J&P Overseas Ltd, Cyprus (Joint Venture EPC Contractor) 9.5% - J&P Avax S.A., Greece (Joint Venture EPC Contractor) 9.5% - EDGO Investment Holdings, Jordan (Financial Investor) 9.5% - Abu Dhabi Investment Company, UAE (Financial Investor) 38% - Noor Financial Investment Company, Kuwait (Financial Investor) 24% Concession Duration: 25 years I s l a m i c D e v e l o p m e n t B a n k 3 3

5 Transaction Structure Bidding financial bids were evaluated based on the payment of annual concession fees as a percentage of gross revenues to the Government. Concession fee - Initial fee of US$1.0 million - Annual fee of 54.47% of gross revenue for 6 years & 54.64% thereafter Sponsors take full commercial & traffic risk Incentives for Sponsors: - Taxation holiday for 10 years - Possible extension of concession for additional 5 years - 100% compensation in the event of termination I s l a m i c D e v e l o p m e n t B a n k 4 4

6 Transaction Structure Refurbishment and improvement of the existing Airport (not including the runway) Build a new terminal in compliance with Foster & Partners design with a capacity of 12 million passengers per year Operation and management of the airport (including collection of revenue and airport charges. (Airport regulated charges are set by the Government with inflation adjustment mechanism) Rehabilitation of the adjacent Alia Hotel and maintain a 4 start standard (not included in IDB financing) I s l a m i c D e v e l o p m e n t B a n k 5 5

7 Project Funding Total Project Value: US$ million (at financial close) Total Financing: US$ million Financing : Istisna a and Ijara - US$100.0 provided by IDB conventional IFC A Loan: US$70m IFC B Loan: US$160m (sub- participated to Calyon, Natixis and Europe Arab Bank) IFC C Loan: US$40m Date of signing: 15th November 2007 Equity - US$160 million with additional US$ 150 million of internal cash generated by the operations of the existing infrastructure during construction I s l a m i c D e v e l o p m e n t B a n k 6 6

8 Islamic Financing Structure IDB financing was provided to AIG under an Istisna a agreement Under a forward lease agreement IDB leased the constructed assets to AIG in return for: (i) advance rentals (on account) during the construction phase; and (ii) rentals during the operational phase till the end of the financing term. BEST COUNTRY DEALS This is a significant deal in every way The deal blends Islamic and conventional facility Term: 18 years including 5 years gestation period The Commission Lease Agreement providing for ownership rights over the lease asset. I s l a m i c D e v e l o p m e n t B a n k 7 7

9 Loan Islamic Financing Structure Commission Lease Agreement Government of Jordan Phase Payments Istisna a (Construction) Agreement Delivery of Asset IsDB Sale Undertaking Purchase Undertaking AIG Ijara (Lease) Agreement Rental Payments Lease of Asset Intercreditor & Security Sharing Agreement IFC I s l a m i c D e v e l o p m e n t B a n k 8 8

10 Salient Project Features & Impact The concession was awarded to AIG with the a bid of % of gross revenues to the Government, the highest revenue sharing percentage for similar projects anywhere in the world. 100% BOT concession given to consortium of operator, EPC contractors and financial investors. The first successful airport public-private partnership project in Jordan and the Middle East and the largest private sector investment in Jordan. The project is expected to generate more than US$ 1.00 billion in foreign direct investment and lead to the creation of 23,000 new jobs over its life span. First Middle-East PPP-style dual tranche pari passu Islamic Facility and Conventional Loan). I s l a m i c D e v e l o p m e n t B a n k 9 9

11 I s l a m i c D e v e l o p m e n t B a n k 10 HAJJ TERMINAL, KING ABDULAZIZ INT L AIRPORT Increase terminal capacity and the quality of airport service Develop the terminal as a commercially viable business, independent of Government subsidies Introduce private sector financing, technical expertise and efficiency Model for similar transactions at other Saudi airports

12 Project at a Glance Description: Building, maintaining and operating the Hajj Terminal in King Abdulaziz International Airport in Jeddah, Saudi Arabia under a Build Transfer and Operate (BTO) structure Concession company: Hajj and Umra Terminals Construction & Development Company Sponsor: Saudi Binladin Group in association with Aeroports de Paris Management Concession Duration: 20 years I s l a m i c D e v e l o p m e n t B a n k 11 11

13 Transaction Structure The concession comprise of three phases: Interim Phase: immediate operational and facility rehabilitation to improve passenger processing before the concession takes over operations; Phase I: increased capacity to process 3,800 arriving passengers and 3,500 departing passengers per hour, which meets the level C service standard from the IATA peak operations; and Phase II: implementation of the concessionaire s strategy and vision for the long range rehabilitation of the complete Hajj terminal complex. - Phase II is not covered under the project funding I s l a m i c D e v e l o p m e n t B a n k 12 12

14 Project Funding Total Project Value: US$ million Combination of equity and debt in the ratio of 20:80 and pre completion revenue Total commercial Financing: US$ million Financing type: 100% Limited Recourse Islamic (Ijara) Project Financing Term: years after 2 years Gestation Period Financiers: Islamic Development Bank (US$105.0 million), Bank Aljazira & Credit Suisse Date of signing: 11 th December, 2007 I s l a m i c D e v e l o p m e n t B a n k 13 13

15 Salient Project Features 100% BTO concession given to a company wholly owned by the Sponsor/EPC contractor with support from ADPM, an operator. Terminal design part of the selection process. The Selection criteria was the passenger charge and technical mark. Operating company jointly owned by the Sponsor/EPC Contractor & ADPM I s l a m i c D e v e l o p m e n t B a n k 14 14

16 I s l a m i c D e v e l o p m e n t B a n k 15 Project Impact ff The project has significant religious importance for Hajj & Umrah pilgrims. It sets a precedent given that it represents the first BTO project in the Middle East and is expected to set the tone for subsequent BTO financing in the Kingdom. The parallel Islamic financing structure adopted for the project is novel.

17 Islamic Financing Structure I Sale of Beneficial Rights in Concession Agreement Financiers Beneficial Rights in BTO Agreement Consideration HTDC I s l a m i c D e v e l o p m e n t B a n k 16 16

18 Islamic Financing Structure II Lease of Beneficial Rights in the Concession Agreement Rental Payments Financiers Lease of Beneficial Rights in BTO Agreement HDTC I s l a m i c D e v e l o p m e n t B a n k 17 17

19 THANK YOU / SHUKRAN I s l a m i c D e v e l o p m e n t B a n k 18