MBJ runway project gets IFC backing
Published:Friday | July 5, 2013 | 12:00 AM
MBJ Airports Limited has cobbled a deal with World Bank affiliate IFC and FirstCaribbean International Bank for US$15 million of financing for the runway expansion project at Sangster International Airport.
The loan is near two-thirds of the US$23.5-million project cost.
The remaining US$8.5 million will be covered from MBJ Airports' internal resources, according to airport operator's chief commercial officer Elizabeth Brown Scotton.
The works to be done, said Brown Scotton, include overlay of the 2.6-kilometre runway, replacement of runway lighting, construction of a perimeter road and construction of a new fire hall for the Emergency Response Services team.
The IFC loan is similar to another facility secured for the initial expansion of Sangster International, the commercial officer said.
MBJ owns and operates Sangster's under a 30-year concession agreement secured in 2003, which requires the concessionaire to upgrade the facility.
"The overlay works, which is an obligation under the concession agreement with the Government of Jamaica, will ensure the life of the runway surface will be extended for another 20 years," Brown Scotton said.
The company performing the works is SBI, a Jamaican-Canadian partnership.
Last December, Surrey Paving and Aggregate Company Limited signed a joint-venture agreement with Belvedere Place Developments Limited and Canada's IDL Projects Inc, forming SBI JV Limited, for the rehabilitation of Sangster's runway.
Surrey Paving said at the time that construction would begin in January 2013 and last up to eight months.
"The existing runway length is 8,400 feet and is sufficient to support most aircrafts landing and taking off. However, the challenge was to provide an extension of another 1,000 feet to accommodate larger aircrafts flying further than Western Europe and opening up new markets in Eastern Europe," said Surrey Paving in its December statement.
Sangster's processes about 3.4 million passengers annually, about twice the load that passes through the Kingston airport.
The IFC, in its disclosure of the new MBJ financing agreement this week, said it has made four investments in the airport since 2003 for a total of US$105 million, including US$53.5 million mobilised from other investors.
Previous IFC loans supported the construction of a new terminal in 2003, the refurbishment of the original terminal buildings in 2005, and the purchase of check-in related equipment in 2008.
The IFC is also engaged as a technical adviser on the planned divestment of Kingston's airport.
Its project support for Sangster's demonstrates "the continued bankability of private infrastructure projects in Jamaica, which is particularly relevant considering efforts to privatise Kingston's Norman Manley International Airport and in the context of limited access to long-term financing in the current market," said Gabriel Goldschmidt, IFC senior manager for infrastructure in Latin American and the Caribbean, quoted in an IFC statement.
Currently, IFC private-sector financing committed in Jamaica values US$285.7 million, the agency said. Worldwide, its investments reached US$20 billion last year.