International Finance Corporation (IFC) announced in a statement that, the rebalancing of the concession agreement has breathed new life into a groundbreaking Saudi Arabian airport Public-Private Partnership (PPP) deal which was impacted due to the COVID-19 pandemic.
IFC was the original Lead Transaction Advisor for the PPP to develop and maintain the Prince Mohammed Bin Abdulaziz International Airport in Madinah for Saudi’s General Authority of Civil Aviation (GACA). The initial 25-year deal – the first of its kind in a Gulf Cooperation Council country – was awarded to a consortium led by Al Rajhi Holdings Group in 2011.
But following a slump in passenger numbers from 8 million to 2 million a year because of the COVID-19 pandemic, the consortium was no longer able to meet its obligations.
IFC’s PPP advisory team was invited by GACA to advise on the structuring of the rebalancing agreement, which enables the authority to preserve the concession.
Mohammed Al-Khuraisi, Vice President, Strategy of GACA said: “IFC originally helped us structure and implement this trailblazing project back in 2011. They had strong knowledge of the concession and excellent expertise. They also advised us in this unprecedented situation. I am very thankful for their instrumental role in the rebalancing of the concession agreement and ensuring continuation and expansion of services at the Madinah Airport in the aftermath of the COVID-19 pandemic.”
The award-winning $1.2 billion airport—the first LEED Gold certified airport terminal outside North America—was inaugurated in 2015 and predominantly serves pilgrims for the Hajj and Umrah. It also paved the way for the development of the PPP program in the country.
“This is a flagship PPP for Saudi Arabia with significant development impact through the services it provides to pilgrim traffic,” said Hela Cheikhrouhou, IFC Regional Vice President, Middle East, Central Asia, Turkey, Afghanistan, and Pakistan. “Rebalancing it bodes well for the PPP program in the country and demonstrates the importance of the partnership approach when things don’t go according to plan.”
