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ADB Lends $40 Million To Build New Terminal In Armenia's Main Airpor

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  • ADB Lends $40 Million To Build New Terminal In Armenia's Main Airpor

    ADB LENDS $40 MILLION TO BUILD NEW TERMINAL IN ARMENIA'S MAIN AIRPORT

    Frontier India -
    http://frontierindia.net/alm/adb-lends-40-millio n-to-build-new-terminal-in-armenias-main-airport/9 15/
    March 29 2010

    The Asian Development Bank (ADB) is providing a loan of up to $40
    million to help build a new terminal at Zvartnots International
    Airport in Yerevan, Armenia.

    The loan marks ADB's first private-sector infrastructure investment
    in Armenia and the Caucasus region and comes at a critical time for
    the Armenian economy. After growing 13.8% in 2007, the country's
    gross domestic product expanded only 6.8% in 2008 and the National
    Statistics Office has reported a 14.4% contraction in 2009.

    "Commercial funding for this and other projects dried up because of
    the global financial crisis so this loan is critical in bringing
    in much-needed external investment that we hope will increase the
    confidence of the international business community in investing in
    Armenia," said Philip Erquiaga, Director General of ADB's Private
    Sector Operations Department.

    The loan will help fund the $173 million cost of a new two-storey
    terminal building to supplement an existing concourse, helping
    Zvartnots International Airport to increase the number of destinations
    it serves and boost the frequency of flights. By the time the terminal
    is operational in 2012, the airport should be able to handle about
    3.2 million passengers a year, up from the current 1.8-2.0 million.

    Armenia's estimated 7-million-strong diaspora, which still has strong
    social and economic ties with its homeland, is also expected to take
    full advantage of the improved air services.

    "For a landlocked country, good infrastructure - and civil aviation
    in particular - is vital as a means of quickly distributing goods and
    services. Faster transport should fuel economic growth and increase
    tourism," said Shantanu Chakraborty, Senior Investment Specialist in
    ADB's Private Sector Operations Department.

    Armenia has a very limited railway system and the road infrastructure
    is in urgent need of fresh investment. As well as this latest loan,
    ADB has also provided $550 million in loans and technical assistance
    to the road sector alone to improve the country's transportation links.

    Zvartnots International Airport, privatized in 2002, is operated by
    Armenia International Airports (ArIA) under a 30-year concession
    granted by the government. ArIA is a wholly-owned subsidiary of
    American International Airports, a New York-based airport holding
    company that holds concessions to manage airports in Argentina,
    Ecuador and Uruguay.

    The floating-rate loan from ADB's ordinary capital resources
    carries a 10.5-year maturity with a grace period of 3.25 years. The
    European Bank for Reconstruction and Development and the Deutsche
    Investitions-und-Entwicklungsgesellschaft are also providing loans
    equivalent to $40 million and $20 million respectively to the project.

    ArIA will finance the remainder of the project cost through equity,
    subordinated loans and internally generated funds.

    From: Emil Lazarian | Ararat NewsPress
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