Sri Lanka airport wraps up US$600mn Japan funding for expansion

ECONOMYNEXT – State-run Airport and Aviation Services (Sri Lanka) Ltd, is expected to call bids for a new terminal building in March 2016 after receiving government nod to wrap up a 74.3 billion yen (614 million dollar) loan from Japan.

The loan will be used to build a new terminal, taxiway and apron, cabinet spokesman minister Rajitha Senaratne said.

The cabinet of ministers had given the go ahead for the airport agency to borrow a 45,428 million yen (374mn US dollars) supplementing the first 28.9 billion yen (239.1 million dollar) loan tranche.

The expansion project will see the capacity at Sri Lanka’s Bandaranaike International Airport boosted to 14.5 million passengers by 2020.

The airport is estimated to have handled around 8 million passengers in 2015, far above its designed capacity of 6 million.

Airport Aviation Services will directly borrow the loan from the Japan International Corporation Agency with a Treasury guarantee.

Sri Lanka in the past used to borrow from foreign governments and on-lend to commercial agencies.

The yen loan comes at 0.1 percent for civil works and 0.01 percent or consulting services with a 40-year payback period and 10-year grace and a 0.2 percent front end fee that will be refunded if the whole loan is disbursed in under 7 years.

The airport agency is expected to call for bids for construction of the new terminal by March and the taxiway and apron earlier. (Colombo/Feb01/2016)





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