ADB Supports Cebu Airport Upgrade in Philippines First Large PPP Project
MANILA, PHILIPPINES – The Asian Development Bank (ADB) has approved a $75 million loan for the expansion and renovation of Mactan Cebu Airport in the Philippines which will boost passenger traffic, support inclusive growth, and mark the first large scale public-private partnership (PPP) project awarded by the government.
The financing for the project also includes debt of P20 billion ($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 in ADB’s Private Sector Operations Department. “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 Airport, which opened in the 1960’s, 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 upgraded one will reach 12.5 million each 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 cofinancing from the consortium of private banks will be provided to GMR Megawide Cebu Airport Corporation, a consortium of India’s GMR Infrastructure Ltd and Philippine construction firm, Megawide Construction Corporation, 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 Corporation 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.