Lima Airport lender line-up takes shape
The $1.8 billion Lima Airport in Peru is expected to close in Q3 2019 to finance the expansion of a second runway and passenger terminal.
The concessionaire Lima Airport Partners (LAP) – comprising Fraport (70%), IFC (20%), and Fund for Investment in Infrastructure, Public Services and Natural Resources (10%) – struggled to obtain the necessary environmental permits, and also faced challenges from EPC contractors (a consortium including FCC Construction, Salini Impreglio and AECOM were awarded the contracts in September 2018). However, LAP have now acquired litigation in relation to land rights and in turn the full lender line-up will emerge by the end of this month.
The $1 billion of debt backing the scheme is expected to be provided by 12 banks. Lender appetite is strong because the airport – also known as the Jorge Chavez airport – is a reputable project with proven passenger flows, which lowers investment risk. SMBC is financial adviser to LAP.
Following debt signing, LAP will then look for equity investors. Financial institutions eyeing up the scheme include Canadian pension funds and Japanese investors. Paul Hastings is acting as international legal counsel to LAP, while Rodrigo, Elias & Medrano is acting on the local side.
