Global development institution IFC has helped rebalance the concession agreement at Madinah Airport, which was badly hit by the COVID-19 pandemic.
IFC was the original lead transaction advisor for the Public-Private Partnership (PPP) to develop and maintain Prince Mohammad Bin Abdulaziz International Airport in Madinah for Saudi Arabia’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.
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. As a result, 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, GACA ,said: "IFC originally helped us structure and implement this trailblazing project back in 2011. I am very thankful for its instrumental role in the rebalancing of the concession agreement and ensuring continuation and expansion of services at Madinah Airport in the aftermath of the COVID-19 pandemic."
The award-winning $1.2bn 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 programme 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 programme in the country and demonstrates the importance of the partnership approach when things don't go according to plan."
A member of the World Bank Group, IFC's global PPP expertise helps national and municipal governments in developing countries partner with the private sector to improve access to energy, transport, healthcare, and sanitation.