2015Airtransportannualreporto

I have the great pleasure of presenting the 11th edition of the World Bank Group (WBG) Air Transport Annual Report, which summarizes the current activities of the air transport practice at the WBG. Over the past sixty years, the WBG has financed numerous aviation related projects. However, as you may notice, air transportation remains a small sub-sector of the transport practice at the WBG. Road investments continue to dominate our portfolio in terms of lending, followed by urban and rail projects. Nevertheless, the impact of our investments in aviation should be underscored. Aviation remains one of the leading modes of transportation for connecting people and economies, and opening markets.

In particular, emerging and developing countries are benefiting most from increased connectivity and greater affordability. For example, the rise of low cost carriers in Asia has not only facilitated travel of business executives and migrant workers, but it has also significantly grown the tourism industry. Tourism, together with aviation, is the world’s largest sector when all the economic impacts are taken into account. In 2015, international tourist arrivals grew by 4.4% to reach 1.2 billion. According to the UN World Tourism Organization (UNWTO), tourism generated close to US$1.5 trillion in exports, which includes many smaller landlocked and island developing countries - focus areas for many of our investments. Aviation, a critical component of the tourism industry, contributes greatly to the mul- tiplier effect: according to ICAO, every $100 of revenue produced by air transport triggers an additional US$325 in the economy, and every 100 jobs generates on average 600 additional jobs in other industries. It is therefore timely that the WBG is launching an integrated sustainable tourism solutions working group to advance the WBG’s work in the sector.

The prospects for the aviation sector are encouraging. In 2015, the air transport industry has ex- perienced one of its best years in history. Aided by lower oil prices, global demand for passenger travel grew by 6.7%, and the industry forecasts total net profits of $36.3 billion. Only air cargo, surprisingly, remained weak (at 1.9% growth), which points to sluggish development of global trade. However, there are significant regional differences in terms of growth. The Asia-Pacific region continues to grow despite the slowdown of the Chinese economy. The performance of Latin American carriers remains weak given the deepening economic crisis in Brazil, weak com- modity prices, and adverse currency fluctuations. The strongest headwinds were faced by airlines in Africa, which lost $300 million in 2015 due to political instability in North Africa, weak economic growth, and stiff competition from international markets.

Recognizing the potential of air transportation to contribute to economic development and shared prosperity, the WBG continues to make much-needed, se- lective investments in the sector. Ultimately, our investments are directed to best serve our clients and their needs. As this report highlights, with an overall portfolio of US$1.47 billion, we remain actively engaged around the world on projects related to air transport policy and regulation, safety, infrastructure rehabilitation, institutional strengthening, and capacity building. Finally, supporting client countries in addressing the environmental challenges of aviation has become a top priority for the WBG and we continue to cooperate with our strategic external partners on this issue.

We look forward to building on our achievements in 2016 as we continue to strive for safe, affordable, and sustainable air transport.

Dr. Charles E. Schlumberger Lead Air Transport Specialist The World Bank Group

ACI Airports Council International ADS-B/C Automatic Dependent Surveillance – Broadcast/Contract AGL Aeronautical Ground Lights ATC Air Traffic Control ATM Air Traffic Management BOT Build-Operate-Transfer BOO Build-Own-Operate BOOT Build-Own-Operate-Transfer BTO Build-Transfer-Operate CAA Civil Aviation Authority CES Charles E. Schlumberger, Lead Air Transport Specialist (WBG) DME Distance Measuring Equipment GNSS Global Navigation Satellite System EASA European Aviation Safety Agency EC European Commission ESW Economic Sector Work FAA Federal Aviation Administration (United States) FY Fiscal Year IATA International Air Transport Association IASA International Aviation Safety Assessment (FAA) IBRD International Bank for Reconstruction and Development (WBG) ICAO International Civil Aviation Organization (UN Agency) IDA International Development Association (WBG) IFC International Finance Corporation (WBG) ILS Instrument Landing System IOSA IATA Operational Safety Audit LCC Low-Cost Carrier MIGA Multilateral Investment Guarantee Agency (WBG) PPPA Public Private Partnership Agreement PPP Public-Private Partnership SARPS Standards and Recommended Practices TA Technical Assistance DOT Department of Transportation USOAP Universal Safety and Security Oversight Audits Program (ICAO) VOR VHF Omni-Directional Radio Range VSAT Very Small Aperture Terminal WBG World Bank Group WRSS World Routes Strategy Summit

This report benefited from the contributions of a number of staff members from across the World Bank Group.

We would like to thank Sabine Beddies, Heinrich Bofinger, Carlo Bongianni, Nick Callender, Mohammed Dalil Essakali, Chris De Serio, Adam Diehl, Donald Hill, Alexandre Leigh, Negede Lewi, Yonas Mchomvu, Gylfi Palsson, Noro Rabefani- raka, Amali Rajapaksa, Tojo Ramanankirahina, Binyam Reja, Ariana Tiwari, and Vincent Vesin.

We would also like to thank Pierre Guislain, Senior Director and Jose Luis Irigoyen, Director of the Transport and ICT Global Practice for their continued guidance and support, and Shruti Vijayakumar for research and preparation of this report.

report. this in covered be not will but the WBG, of part a also is (ICSID) Disputes ment Invest- of Settlement for In- Centre The ternational in- countries. direct developing in foreign vestment facilitate to or guarantees insurance risk political provides Agency (MIGA) The Guarantee countries. Investment Multilateral sector developing private in stimulate investment to services sory advi- and equity, Corpora- loans, provides (IFC) Finance tion International The middle tries. of low creditworthy governments and (IBRD), income to lends Development which Re- and for Bank construction International the is arm ing lend- by original Bank’s World The grants. and countries interest poorest that providing world’s Bank World the the of helps part the is (IDA) Association Development International The Structure New and Institutions The and agriculture, ICT. and transport development, sector private administration, public edu- health, cation, including sectors of number a across ty. socie- civil as well as and actors, sector public private relevant with partnerships and tackle to - cutting aims financing, through Group challenges these Bank World The  to  aims Group 2030: by Bank goals major two achieve ser- World advisory The and vices. credits, grants, low loans, of provision the the around through assis- world countries technical developing and to tance vital financial a is of (WBG) source Group Bank World The Mission The edge solutions, cross solutions, edge

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allows people to interact and generate the the generate and interact to and people of world; allows the supply around services the and enables goods and it education, services; jobs, health to people connects infrastructure Transport development. social and economic of driver critical a is Transport Connectivity and Mobility Enhancing and prosperity. shared poverty boosting extreme ending of goals twin the meeting toward work ultimately and ity, improve sustainabil- to financial efficiency, intended operational are institution. changes the These improve across and sharing knowledge collaboration strengthen to and Cross Practices Global with new structure Bank’s nimble The Practice. Global a now is ICT major and Transport and undergone change, institutional recently has WBG The connectivity on a national, regional, and regional, national, a on vital connectivity provides and economy global the into integration facilitates employ- It creating opportunities. ment and tourism, promoting trade, generating integration, economic ing facilitat- in particularly development, tering fos- in role important an plays transport Air billion. US$45 around of with portfolio active an globally, transport for devel- finance of opment provider largest the is WBG The Bank’s work. policy the and investments guide infrastructure principles three These would that be countries developing for solutions mobility envisioned 2008, in adopted World The connectivity. Bank’s greater for cross tions innovative deliver and large sup- to port positioned uniquely is Group Bank A greater mobility. through development human trade enhanced efficientand more facilitated have ments invest- transport Bank’s World The growth. andlongsolutionsknowledgethatfoster a multi a s

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international scale. However, in many countries port, which is being funded through a US$50 mil- the air transport equipment and infrastructure, reg- lion loan. ulatory frameworks, and safety and security oversight systems are inefficient or inadequate. The International Finance Corporation (IFC) did not make any new commitments in the air In view of these challenges and to assist clients in transport sector in FY15. New commitments made establishing a safe, secure, cost efficient, accessi- in 2014 including ASECNA in Africa, Queen Alia II ble and reliable air transport network, the Bank is in Jordan, and Zagreb Airport in Croatia. IFC Advi- mandated to undertake the following major activi- sory Services were also initiated in Brazil (Galeão ties: and Confins Airports) and in Saudi Arabia (Jeddah  Operational work through projects and tech- Airport and Taif Airport) in 2014. MIGA has been nical assistance. involved in the air transport sector in the past  Economic sector work, research, and through the issuance of guarantees for two airport knowledge dissemination on air transport relat- projects in Ecuador and Peru. ed issues.  External relations and collaboration with part- Research and External Relations ner organizations. World Bank staff members continue to represent  Internal services (such as the airline advisory the organization externally at various air transport service for WBG staff travel). conferences and events, notably the inaugural ACI -WBG Aviation Symposium in London, UK. Re- Portfolio and Project Highlights search and knowledge dissemination also continue In Fiscal Year 2015 (FY15), WBG’s Air Transport to be critical functions of the WBG’s Air Transport Portfolio amounted to US$1.47 billion, an increase Community of Practice (ATCOP). Looking forward, of 2% from Fiscal Year 2014 (FY14). The Air the practice maintains its strong commitment to Transport segment makes up around 3% of the addressing the challenges of its client countries. WBG’s US$45 billion Transport portfolio. The WBG’s FY15 Transport portfolio consists approximately 19% of the WBG’s active portfolio of US$248 billion (excluding MIGA).

The Air Transport portfolio includes around 26 projects or project components through the Interna- tional Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), as well as the International Finance Corpo- ration (IFC)’s portfolio of lending and investment advisories in the aviation sector.

Project highlights in 2015 include the approval of the $52 million DRC Goma Airport Safety Improve- ment Project and $59.2 million IDA credit for the Vanuatu Aviation Investment Project as part of the Pacific Aviation Investment Program (PAIP). PAIP is currently being implemented in Kiribati, Tonga, Tuvalu, and Samoa. Current IBRD projects in air transport include the Cairo Airport Development Project, which is being funded through a US$280 million loan and the Shangrao Sanquingshan Air-

The WBG is a vital source of financial and technical assistance to developing countries through low-interest loans, credits, and grants. In Fis- cal Year 2015, the World Bank's Air Transport Portfolio is around US$1.47 billion. This included around 26 active lending projects or project components through the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), as well as the International Finance Corporation (IFC)’s portfolio of lending and investment advisories in the aviation sector.

Active Portfolio IBRD IDA IFC TOTAL

(in millions USD) FY15 FY14 Change FY15 FY14 Change FY15 FY14 Change FY15 FY14 Change

WB Group Total Ac- 99,574 109,878 -9.38% 92,334 86,601 6.62% 50,402 51,735 -2.58% 242,310 248,214 -2.38% tive Portfolio

WB Group Active 26,817 28,676 -6.48% 16,078 15,535 3.50% 2,930 3,003 -2.41% 45,826 47,213 -2.94% Portfolio-Transport

Transport % of Total 26.93% 26.10% 0.83% 17.41% 17.94% -0.52% 5.81% 5.80% 0.01% 18.91% 19.02% -0.57% Active Portfolio

Air Transport Active 325.20 328.92 -1.13% 506.55 456.79 10.89% 635.50 647.11 -1.79% 1,467.25 1,432.82 2.40% Projects

% of Total Active 0.33% 0.30% 0.03% 0.55% 0.53% 0.02% 1.26% 1.25% 0.01% 0.61% 0.58% 4.90% Portfolio

% of Total Transport 1.21% 1.15% 0.07% 3.15% 2.94% 0.21% 21.69% 21.55% 0.14% 3.20% 3.03% 5.50% Portfolio

Note: Excluding the Multilaterial Investment Guarantee Agency (MIGA)

ic/advisory services. infrastructureing investments, and as well assistance technical andanalyt- as regulatory projectscapacityair worldwide on transport focusing reform, build- AirActive FY15: in Projects Transport

IBRD and IBRDinvestin ofIDA and number a

IBRD AND IDA LENDING PROJECTS

WGB Commitment Status as of Project Description of Aviation Compo- (Million US$) Region Country Project Name Type End of Code nent Aviation Total FY2015 Component

Burkino Faso Donsin Technical assistance for new Ouagadougou Africa Burkina Faso P120960 Transport Infrastruc- 85.0 1.7 IDA Credit Active Airport ture Project

Cape Verde -Transport Institutional capacity building, technical as- Africa Cape Verde P126516 19.0 2.1 IDA Credit Active Sector Reform Project sistance, and support of national airline

Democratic Improve the safety, security, and operations Goma Airport Safety Africa Republic of P153085 of Goma International Airport through infra- 52.0 45.2 IDA Grant Active Improvement Project Congo structure investments and capacity building.

Democratic Multi-Modal Improve transport connectivity and support Africa Republic of P092537 255.0 25.5 IDA Grant Active Transport economic integration in the region Congo

Democratic Multi-Modal Improve transport connectivity and support Africa Republic of P129594 Transport - Additional 180.0 9.0 IDA Grant Active economic integration in the region Congo Financing

Transport Sector Sup- Enhance aviation security and safety, and Africa Kenya P124109 300.0 27.0 IDA Credit Active port Project improve institutional capacity WGB Commitment Status as of Project Description of Aviation Compo- (Million US$) Region Country Project Name Type End of Code nent Aviation Total FY2015 Component

Transport Sect Sup- Enhance aviation security and safety, and Africa Kenya P146630 port Project - Addi- 200.0 30.0 IDA Credit Active improve institutional capacity tional Financing

Northern Corridor Enhance aviation security and safety, and Africa Kenya P082615 Transport Improve- 207.0 31.1 IDA Credit Active improve institutional capacity ment Project

Northern Corridor Transport Improve- Enhance aviation security and safety, and Africa Kenya P106200 253.0 48.1 IDA Credit Active ment Project - Addi- improve institutional capacity tional Financing

Transport Sector Sup- Rehabilitation and extension of regional air- Africa Tanzania P055120 270.0 56.7 IDA Credit Active port Project ports

Transport Sector Sup- Expand capacity of regional airports; improve Africa Tanzania P126206 port - Additional Fi- 59.0 57.2 IDA Credit Active operational safety nancing

Second Central Improve Zanzibar Airport facilities and build Africa Tanzania P103633 190.0 17.1 IDA Credit Active Transport Corridor capacity IBRD AND IDA LENDING PROJECTS (continued)

WGB Commitment Status as of Project Description of Aviation Compo- (Million US$) Region Country Project Name Type End of Code nent Aviation Total FY2015 Component

Improve airline connectivity and environ- China - Shangrao San- East Asia mental sustainability of development and China P123729 qingshan Airport Pro- 50.0 48.0 IBRD Loan Active and Pacific operation of the Shangrao Sanqingshan Air- ject port

Infrastructure investment, sector reform and East Asia Pacific Aviation Invest- Kiribati P128938 training, and strengthening airport opera- 22.9 19.5 IDA Grant Active and Pacific ment - Kiribati tions and management capacity

East Asia Pacific Is- Pacific Aviation Safety Strengthen the Pacific Aviation Safety P145057 2.2 2.2 IDA Grant Active and Pacific lands Office Reform Office’s technical and coordination capacity

East Asia Samoa Aviation In- Samoa P143408 Improve operational safety and oversight 25.0 23.0 IDA Grant Active and Pacific vestment Project

Infrastructure investment, sector reform and East Asia Pacific Aviation Invest- Tonga P128939 training, and strengthening airport opera- 27.2 21.0 IDA Grant Active and Pacific ment - Tonga tions and management capacity

Tonga Transport Sec- East Asia Improve safety and security compliance; pro- Tonga P096931 tor Consolidation Pro- 5.4 2.4 IDA Grant Active and Pacific vide technical assistance to CAA ject WGB Commitment Status as of Project Description of Aviation Compo- (Million US$) Region Country Project Name Type End of Code nent Aviation Total FY2015 Component

Infrastructure investment, sector reform and East Asia Pacific Aviation Invest- Tuvalu P128940 training, and strengthening airport opera- 11.9 10.3 IDA Grant Active and Pacific ment - Tuvalu tions and management capacity

Pacific Aviation Invest- East Asia Infrastructure investment, sector reform and Tuvalu P145310 ment - Tuvalu - Addi- 6.1 3.0 IDA Grant Active and Pacific training tional Financing

Improve operational safety and oversight of East Asia Pacific Aviation Invest- Vanuatu P154149 international air transport and associated 59.5 54.7 IDA Credit Active and Pacific ment -Vanuatu infrastructure

Latin Amer- National Roads and Infrastructure development; improve safety, ica and Car- Bolivia P122007 Airport Infrastructure security and operational reliability of the 109.5 5.5 IDA Credit Active ibbean Project Rurrenabaque Airport

Latin Amer- Grenada, St. Regional Disaster Vul- ica and Car- Vincent, the P117871 nerability Reduction Improve emergency response capability 20.9 5.0 IDA Credit Active ibbean Grenadines Project (APL1)

Regional Disaster Vul- Latin Amer- St. Vincent nerability Reduction ica and Car- and the P146768 Improve emergency response capability 16.6 3.3 IDA Credit Active Project - Additional ibbean Grenadines Financing IBRD AND IDA LENDING PROJECTS (continued)

WGB Commitment Status as of Project Description of Aviation Compo- (Million US$) Region Country Project Name Type End of Code nent Aviation Total FY2015 Component

Middle East Build capacity of Cairo International Airport; Cairo Airport Develop- and North Egypt P101201 rehabilitation and expansion of Terminal 280.0 277.2 IBRD Loan Active ment Project-TB2 Africa Building 2; safety and security

Middle East Port Cities Develop- Improve efficiency, and rehabilitation and and North Yemen P088435 35.0 6.0 IDA Grant Active ment II Project extension of Mukalla Airport Africa

IBRD AND IDA PIPELINE PROJECTS WGB Commitment Status as of Project Description of Aviation Compo- (Million US$) Region Country Project Name Type End of Code nent Aviation Total FY2015 Component

Cameroon Transport To improve safety and security at Came- Africa Cameroon P150999 192.0 28.8 IBRD Pipeline Sector Support Project roon’s four international airports

The proposed project involves amongst oth- Airport Modernization ers modernization of Kenyan major airports Africa Kenya P156971 - - IDA Grant Pipeline Project including enhancing security to meet international standards Lesotho Transport Africa Lesotho P155229 Infrastructure and Restructuring of aviation sector 30.0 6.0 IDA Grant Pipeline Connectivity Project WGB Commitment Status as of Project Description of Aviation Compo- (Million US$) Region Country Project Name Type End of Code nent Aviation Total FY2015 Component

Great Lakes Trade Fa- Africa Rwanda P151083 Investment in Kamembe Airport in Rwanda 61.0 14.2 IDA Grant Pipeline cilitation

Pacific Aviation Invest- East Asia Additional financing for the Kiribati Aviation Kiribati P153381 ment - Kiribati- Addi- 7.1 5.8 IDA Grant Pipeline and Pacific Investment Project to cover a financing gap tional Financing

Pacific Aviation Invest- East Asia Additional financing for the Samoa Aviation Samoa P157241 ment - Samoa - Addi- 16.6 15.3 IDA Grant Pipeline and Pacific Investment Project tional Financing

Pacific Aviation Invest- East Asia Additional financing for the Tonga Aviation Tonga P156018 ment - Tonga - Addi- 7.3 7.3 IDA Grant Pipeline and Pacific Investment Project tional Financing

Pacific Aviation Invest- East Asia Additional financing for the Tuvalu Aviation Tuvalu P157779 ment - Tuvalu - Addi- 2.9 1.4 IDA Grant Pipeline and Pacific Investment Project tional Financing II

East and The overall objective of this operation is to Central Tajikstan P126272 Tajikistan DPF-1 support jobs creation through growth en- 30.0 3.6 IDA Pipeline Asia chancing reforms

East and This operation is to continue to help the gov- Central Tajikstan P126273 Tajikistan DPO-2 30.0 7.2 IDA Pipeline ernment maintain high growth Asia IBRD AND IDA NON-LENDING PROJECTS

Aviation Status as Project Region Country Project Full Name Description of Aviation Component Compo- Type of End of ID Code nent FY2015

Support the Government in addressing selected Gabon Transport Sector Africa Gabon P130427 issues in the transport sector, including reduction 15% TA Closed Technical Support of the costs of maritime and air transport

Air Transport in West Policy reform roadmap to develop air transport as Africa Regional P149328 100% ESW Active and Central Africa a means to regional economic integration

Transport Sector Support Assist in the reform of Civil Aviation Zimbabwe Africa Zimbabwe P157125 20% TA Active to ZIMREF (CAZ) through support to capital budget TA

East Asia and Malaysia National Malaysia P144910 Development of national transport strategy 10% TA Closed Pacific Transport Strategy

Support tourism development in selected South Pacific economies as a conduit for economic East Asia and Host to the World - Pa- Pacific Islands P155515 growth, job creation and trade by fostering air 65% ESW Active Pacific cific Possible travel connectivity between the Pacific Islands and China

The objective includes helping the government in East Asia and Transport Development developing options and strategies to improve con- Philippines P145329 20% TA Closed Pacific Framework Plan TA nectivity in the different regions of the country especially in rural areas WGB Commitment Aviation StatusStatus as asof ProjectProject Description of Aviation Compo- (Million US$) RegionRegion CountryCountry ProjectProject Name Full Name Description of Aviation Component Compo- TypeType ofEnd End of of CodeID Code nent Aviation Total nent FY2015FY2015 Component

To showcase and share international experiences and best practices of improved connectivity and East and Engagement in Transport Turkmenistan P152386 its benefits to promote competitiveness of nation- 10% TA Closed Central Asia Sector al economies with policy-level and technical-level government officials in Turkmenistan

The overall objective is to contribute to the im- Latin Ameri- provement of the PPP environment in Central Guatemala Transport ca and Carib- Guatemala P145325 America through attracting private sector invest- 15% TA Closed and Logistics bean ment, supporting the development of infrastructure, and improving delivery of public services

The objective is to investigate the effects of transport connectivity on a LCR subregion, how Latin Ameri- LCR Connectivity and connectivity is characterized spatially, and how ca and Carib- Latin America P151023 20% ESW Closed Equity: Regional Study various levels of transport connectivity (access bean and costs) can ultimately create more equitable

opportunities

To assess the current status and performance of Middle East the transport sector (including air), identify chal- and North Jordan P148494 JO-Transport Sector TA 20% TA Closed lenges, and recommend priority areas for reforms Africa and investments

Development of Domes- Introducing private sector participation in the de- South Asia Sri Lanka P146193 100% TA Active tic Airports velopment of domestic airports in Sri Lanka

CABO VERDE Democratic Republic of Congo (DRC) and repair Cabo Verde Transport Sector Reform Pro- the infrastructure. The airport is a vital link to con- ject (P126516) necting the area to the rest of the country and supporting ongoing peace consolidation efforts. In ad- The objective of the project, in the IDA amount of dition to decades of conflict, the most significant US$19 million, is to improve efficiency and man- damage to the airport’s sole runway and taxiway agement of the national road assets and to lay the resulted from the 2002 Mount Nyiragongo volcano groundwork for transport sector State Owned En- eruption. terprise reform. Among the concerned transport sector State Owned Enterprises is TACV, the na- The lava flow from the volcano buried more than tional airline company, which is structurally in defi- one third of the 3,000-meter runway and isolated the terminal and apron, constraining humanitarian cit. Improving the efficiency of TACV requires strong political will and leadership given the sensi- aid flows, UN operations, and passenger and car- tivity of the company in Cabo Verde. An amount of go transport. There have been seven recorded air about US$475,000 has been allocated to the air crashes since 2002 at the airport with dozens of transport subsector in the project. fatalities, many of them attributed to the condition of the airport. As of today, three studies have been completed to inform decision makers and Government officials The project will rehabilitate the airport’s runway on the possible way forward to improve the air and apron, existing passenger terminal, and elec- transport subsector. The first one is an analysis of trical system, as well as supply and install a new the impacts of air transport agreements; the sec- mobile control tower and navigational equipment to ond one is the prefeasibility study of an MRO in upgrade air navigation. The project will also in- Cabo Verde; and the last one is the study on the clude the construction of the airport’s security different models of public service obligation for the fence and support airport rescue and firefighting archipelago. Recently, the Government has in- services. formed the World Bank that they would hire a transaction advisor via the project to assist them in The project will also support capacity building and privatizing TACV. Finally, a performance agree- project implementation through the preparation of ment between TACV and both the Ministry of Fi- a rehabilitation program and provision of technical nance and the Ministry of Infrastructure has been assistance, the monitoring of volcano risks and signed for the period 2014 to 2016 but the different strengthening preparedness of the airport and sur- performance indicators would need to be moni- rounding communities, and the strengthening of tored. the economic and social fabric of the communities around the airport. Contact person is Tojoarofenitra Ramanankirahina at [email protected]. The significance of the project is evident – DRC’s landmass is almost as large as the whole of West- ern Europe, therefore transport remains key to increasing agriculture, improving trade, supporting DEMOCRATIC REPUBLIC OF CONGO mining growth, overcoming the economic and so- Goma Airport Safety Improvement Project cial barriers that isolate communities, and providing security throughout the country. (P153085)

Contact person is Mohammed Dalil Essakali at In FY15, the World Bank’s Board approved a [email protected]. US$52 million IDA grant to help improve the safety, security, and operations of Goma International Airport, the main international gateway of Eastern

tion of ADS-B surveillance equipment by the Na- tional Airways Management Agency/Regie des Voies Aeriennes (RVA), the organization in charge of airports, (ii) a new category II ILS/VOR/DME system for the capital’s international airport Kin- shasa/N’Djili (FIH), (iii) two studies on the development of airports in the country (one on freight development at FIH, and one on secondary airports), (iv) training for RVA personnel in air traffic control, airport rescue and firefighting services, and (v) the strengthening of the National Civil Aviation Agen- cy, which is in charge of overall regulation of the sector.

Key activities related to aviation have already been implemented, albeit with some delays in procurement and reforms. The study on the cargo zone in Djili airport is complete and the study on secondary airports has started. The procurement of the navigation assistance systems (CNS/ATM and ADS-B) and of the landing assistance systems (ILS/DME and DVOR/DME) is complete. Their in- DEMOCRATIC REPUBLIC OF CONGO stallation on-site is being coordinated with the con- Multi-Modal Transport Project struction of the new control tower in Njili Airport. (P092537, P129594) There still remain areas of improvement for the The Bank approved a US$255 million IDA grant for reform of governance in the aviation sector. Five of the Multi-Modal Transport Project in the Democrat- the largest airlines in DRC seeking recertification ic Republic of Congo (DRC) in 2010 as well as a initially failed to provide the requested documenta- US$180 million additional financing IDA grant in tion. The government is currently refining a sector- 2013. The project’s main objectives are to (i) im- wide strategy that confirms some needs, such as prove transport connectivity in the DRC, (ii) to re- direct technical assistance from ICAO. The World store Société Nationale des Chemins de Fer du Bank is coordinating with other donors, including Congo (National Railway Company of DRC, the African Development Bank and ICAO, on this SNCC) financial and operational viability, and (iii) matter. to strengthen transport state-owned enterprises (SOEs) operational performance. Contact person is Mohammed Dalil Essakali at The project’s four main components include: (1) [email protected]. SNCC recovery plan, (2) operational performance strengthening and improved governance of the sector, (3) international trade procedures simplifi- cation, and (4) project management.

All funds from the original grant have been fully disbursed and commitments under the additional financing are progressing. The funds dedicated to aviation finance (i) the procurement and installa-

KENYA key flight safety operations staff, which is critical Transport Sector Support Project (P124109, for carrying out its oversight function. Furthermore, P146630) and Northern Corridor Transport KAA has taken over the responsibility of screening Improvement Project (P082615, P106200) passengers and baggage from the Kenyan police. A consultant has been selected and is assisting in

the restructuring process. A $300 million IDA commitment was approved in

2011 for the Transport Sector Support Project in Constructing an office block to house KCAA is ex- Kenya. The project’s objective is to increase the pected to be completed by end of October 2015 efficiency of road transport, raise aviation safety including the access road. Otherwise the rest of and security at Kenya’s airports to international the activities under this component are completed standards, and improve the institutional arrange- including the supply of air navigation equipment for ments and capacity of the transport sector. enhancing the safety of the Kenyan airspace.

Following the fire tragedy at Jomo Kenyatta Inter- KAA has to conclude the procurement of several national Airport (JKIA) in August 2013 that de- outstanding contracts including reconstructing the stroyed the only international arrival building, the runway at MIA Mombasa, design for upgrading Bank provided an additional financing component power supply at MIA, design for augmenting water of $60 million to help finance activities to restore supply at JKIA, MIA and Kisumu airport, and sup- the capacity of the international passenger termi- ply of apron buses at JKIA. nal destroyed in a fire at JKIA, strengthen KAA in disaster preparedness and responsiveness at Ken- Implementation on the Northern Corridor Transport yan airports, and fill any unanticipated financing Improvement Project is on track as well, despite gaps. Most of the emergency activities at JKIA fol- some delays. The expansion of apron at JKIA and lowing the fire incident have either been completed taxiways has increased the capacity of parking or are nearing completion. The outstanding emer- space for aircrafts by 50 percent, and expanded gency activities are expected to be completed by the capacity of the runway. The selection of a con- end of October 2015. sultant to update the detailed designs on the re-

modeling, renovation and expansion of Units 1, 2, The aviation component of the project entails and 3 at JKIA is nearing completion but with modi- providing support to the Kenya Civil Aviation Au- fied scope of the assignment that has to take into thority (KCAA) in regulatory capacity building and account the impact of the fire incident. The con- through specific investments in navigation aids struction of Terminal 4 (renamed T 1A) is complet- and training equipment. In addition, support to ed except for two supply and install contracts that Kenya Airports Authority (KAA) will include provi- will be completed by April 2015. Nevertheless the sion of a new baggage-handling system at Jomo terminal is in use. Kenyatta International Airport (JKIA), and capacity building and training of manpower in safety, secu- Expansion and improvements at Kisumu airport is rity, and airports management. now complete, and has contributed to the stimula-

tion of economic activities in Western Kenya. Traf- As planned under the project, the Government of fic at the airport has grown from 40,000 passen- Kenya agreed to the restructuring of the KCAA by gers at the time of appraisal to 400,000 in the year separating the oversight function from its service 2013. provision responsibilities to improve effectiveness of oversight services and contribute to enhanced Contact person is Josphat O. Sasia at efficiency among service providers. Both KAA and [email protected]. KCAA have been given financial autonomy and now retain revenues generated. As part of this process, KCAA has increased the pay packages for

RWANDA goods from the Middle East and ship them through Great Lakes Trade Facilitation: Kamembe Rwanda. The airport has great potential, with pas- Airport (P155329) senger traffic growing at an average of 15 percent per annum between 2006 and 2013, and at an av- As part of the Great Lakes Trade Facilitation Pro- erage of 19 percent between 2010 and 2013. ject, the Bank is investing US$ 14.2 million in Kamembe Airport in Rwanda, East Africa. Kamem- The RCAA will soon complete rehabilitation of the be is the closest operational air gateway for 60 year old runway which was in poor condition Bukavu, a city of 1 million people in DRC in the and posed a safety risk to passengers and in- southern tip of Lake Kivu, which is only 7km away. creased costs for airlines. The project will comple- While Bukavu has Kavumu as a local airport, there ment the government investment in the runway are only limited domestic flights at that airport. and finance new navigational aids and weather Kamembe, in contrast, has a comparative ad- equipment, aeronautical ground lighting, airport vantage over other airports in the region: both perimeter fencing and lighting and a transit cargo Goma (DRC) and Bujumbura (Burundi) airports are facility. The improvements to the airport are a pri- more than 100km from Bukavu while Kamembe is ority of the government and are part of the coun- 25 minutes flying time from Kigali, through which try’s Strategic Transport Master Plan, which was travelers can connect to the rest of the world. elaborated in September 2012.

The majority of passengers passing through Contact person is Charles Kunaka at Kamembe are Congolese (about 90 percent), a [email protected]. significant proportion of whom source tradeable

TANZANIA TANZANIA Transport Sector Support Project Second Central Transport Corridor Project (P055120, P126206) (P103633)

In May 2010, the Bank approved a credit of Approved for a credit of US$190 million on 27 May US$270 million for the Transport Sector Support 2008, and additional financing of US$100 million Project (TSSP) in Tanzania. In support of the on 15 January 2013, the Second Central Transport Transport Sector Investment Program (TSIP), the Corridor Project (CTCP2) in Tanzania aims to sup- project’s goal is the rehabilitation and preparation port the country’s economic growth by providing of designs for part of the paved national road net- enhanced transport facilities that are reliable and work, and the rehabilitation and/or upgrading of cost effective, in line with the National Transport regional airports. Policy and Strategy. This includes the establishment of the Bus Rapid Transit (BRT) system in Dar The project received additional funding (AF) of es Salaam and the rehabilitation and extension of US$59 million on 30 June 2011. This prompted the Zanzibar airport runway. revision of the project development objectives and expanded the scope of the aviation component. The Zanzibar airport component (US$39.3 million) The component for airport upgrades and rehabilita- was implemented successfully between April 2009 tion includes (i) the paving and rehabilitation of the and July 2010 and was completed officially on 3 runway at Kigoma airport (ii) the rehabilitation of August 2010. The airport’s runway was rehabilitat- the main runway at Tabora airport, as well as (iii) ed and extended by 560 meters, from 2462 meters the extension, rehabilitation and paving of the run- to 3022 meters long. Other works included runway way and the replacement of the apron, terminal marking, the construction of a perimeter access and car parking at Bukoba airport, which were road, repair and provision of new aeronautical signed in FY12. ground lights (AGL), and provision of a new filter drainage system on each side of the runway for The works at Kigoma and Tabora Airports has the full length. been completed and final acceptance was done in June 2014. The Bukoba airport runway, and apron The project also financed the detailed design for were also completed and final acceptance was the rehabilitation and extension of Zanzibar airport done in December 2014. The construction of Buko- taxiways and apron and technical assistance to the ba airport terminal building was completed and Zanzibar Ministry of Infrastructure and Communi- provisionally accepted in September 2015. The cation. The apron and taxiway rehabilitation works extension, and rehabilitation and widening works were implemented under the additional financing of the main taxiway (taxiway C), and the construc- credit of IDA’s Transport Sector Support project tion of the new apron, taxi way D, and a new link (TSSP), with an allocation of US$57.23 million for taxiway in the Zanzibar airport are completed and works and supervision. The project improved safe- final acceptance is expected within January 2016. ty and customer satisfaction and has enabled an The feasibility study and detailed engineering de- increase in the number of commercial regular sign of 11 regional airports as well as the prepara- flights to Zanzibar. tion of the Civil Aviation Master Plan have also been completed under the project. Contact Person is Yonas Mchomvu at [email protected]. Contact person is Negede Lewi at [email protected].

CHINA disbursed 57%, which is ahead of the disburse- Shangrao Sanquingshan Airport Project ment schedule. On the airfield construction side, (P123729) the major earthwork, taxiway, and runway have been completed. The terminal building is in ad- A $50 million IBRD commitment for the Shangrao vanced stages of construction, and is following the Sanqingshan Airport Project was approved in May green airport design agreed during project prepa- 2013. The overall objective of the project is to im- ration. Once completed, the airport will go through prove airline connectivity in the northeastern evaluation and certification of the design. Jiangxi province, as well as demonstrate the environmental sustainability of the development and The second project component finances consultan- operation of the Shangrao Sanqingshan Airport. cy services, studies and training, including advisory services to support the Project Management Of- The first component of the project covers the air- fice (PMO) and Shangrao Sanqingshan Airport port infrastructure development and includes the Company Limited (SSAC) on project coordination construction and installation of the following: (a) and monitoring activities. Other activities will in- airfield, runway, taxiway, etc.; (b) terminal building; clude consultancy services to develop airport oper- (c) air traffic control; (d) freight facility; (e) support- ation model for SSAC and compliance with regula- ing infrastructure facility, including fuel storage tions and international practices. farm, water supply, water supply, power supply, fire stations, heating, storm/water management, The project management consultant was hired and parking, fence, etc.; (f) environmental manage- has been on board since January 2015 to assist ment plan; (g) land acquisition and rehabilitation; the PMO. To improve PMO's technical and man- (h) auxiliary facility; (i) service vehicles; and (j) agement capacity, six trainings have been con- storm water reuse system and ground aircraft aux- ducted since January 2014. The trainings cover iliary power unit. the following topics: project management, contract management, procurement for Civil Works and The project is well on track to achieve its PDO. Goods, procurement for consultancy service, and With 2.5 years into implementation, the loan has financial management.

The project remains well on track to achieve its The funding allows grant recipients to purchase PDO. With the construction well advanced, the fo- regulatory oversight advisory services in fulfilling cus of the project supervision has turned to opera- safety inspection requirements for international tional arrangements, securing airline service aviation, while also supporting their obligations as agreements, and sharing of green airport design a signatory to the Pacific Islands Civil Aviation practices more widely. Safety and Security Treaty.

Contact person is Binyam Reja at KIRIBATI [email protected]. Kiribati Aviation Investment Program (P128938)

PACIFIC AVIATION INVESTMENT With an original IDA Grant commitment of PROGRAM US$22.91 million, the project is entering its fourth In December 2011 IDA approved the Pacific Avia- year in implementation. The AU$5 Safety and Se- tion Investment Program (PAIP), a series of pro- curity Levy on departing international passengers jects designed to ensure that critical aviation infra- has been successfully implemented and is being structure meets operational safety requirements, collected, which represents a major policy as well as to measures to strengthen regulatory achievement that will result in increased fiscal re- compliance of international air transport of the par- sources towards safer and more secure air ticipating Pacific Island Countries. Major elements transport operations. Progress to date includes: (i) of the US$155 million program focus on the up- construction of the security fence around Bonriki grading of and maintenance of critical airport infra- airport to improve the safety of operations; (ii) de- structure, including runway and apron rehabilita- velopment of a Kiribati Transport Sector Plan, and tions, improvements to airport terminals, aeronau- completion of an Air Service Agreement Study; (iii) tical equipment (navigation aids, runway lighting), completion of a Training Needs Analysis with fire and rescue equipment, as well as technical budget available to the State for implementation. assistance with strengthening of policy and regula- Navigational aids and communications equipment tory capacity through master planning, reviewing are expected to be installed at CXI and TRW air- air services agreements and developing aviation ports in 2016. Contracts for the VSAT design, sup- sector strategies. ply and installation are in place and it is expected that this will be completed in 2016, which was pro- Phase I of PAIP includes projects in Kiribati, Ton- cured as a regional good. Also completed is the ga and Tuvalu. Samoa entered the program in assessment and specifications of rescue fire ser- April 2014 as Phase 2, and IDA has since ap- vice vehicles; upgrading of the airfield rescue and proved Phase 3 with Vanuatu in March 2015. Solo- fire-fighting compliance category will be achieved mon Islands remains an eligible entrant to the IDA after a regional procurement for vehicles is ten- regional program. IDA also approved a Pacific Avi- dered. An ADS-B Implementation Coordinator is ation Safety Office Reform Project in September supporting equipment and equipage needs, in 2013 in support of the regional entity’s regulatory preparation of a regional rollout of ADS-B, to be advisory mandates. procured as a regional activity. An increased use of PASO services has been facilitated through The Pacific Region Infrastructure Facility (PRIF), a PRIF. Additional Financing (IDA Grant) is currently multi-donor trust fund, has supported PAIP with under preparation to meet funding shortfalls on the resources to enable the continuation of on-going original project and to improve coastal protection. regional aviation safety and security oversight in participating States during a restructuring and tran- Contact person is Pierre Graftieaux at sition of the Pacific Aviation Safety Office (PASO) [email protected] or Christopher Bennett through the IDA-financed PASO Reform Project. at [email protected].

SAMOA TONGA Samoa Aviation Investment Program Tonga Aviation Investment Program (P143408) (P128939)

With an original IDA Grant contribution totaling With an original IDA Grant contribution of US$25.0 million, the project is in the second year US$27.21 million, the project is in the fourth year of a five year implementation schedule. The AU$5 of a five-year implementation schedule. The AU$5 Safety and Security Levy was approved and began Safety and Security Levy on departing internation- revenue collection in late 2015, representing a ma- al passengers has been successfully implemented jor policy achievement early in the project that will and is being collected, which represents a major enable increased fiscal resources towards safe policy achievement that will result in increased fis- and secure air transport. Multiple activities are cur- cal resources towards safer and more secure air rently underway, and key achievements including transport operations. Upgrading and rehabilitation the completion of pavement coring and deflection of runway pavements at both the Fua’amotu Inter- testing, and topographical surveys, which are to national Airport (TBU) and the Vava’u International inform the on-going design services for airfield Airport (VAV) have commenced and are to be pavements. Key technical assistance activities in- completed in 2016. Several other key activities clude an Air Transport Sector Strategy and an Air- have been completed: (i) terminal upgrade, and port Development Plan and Business Strategy for commissioning of requisite security equipment on Samoa Airport Authority, the tendering of which is site at Vava’u to support regional operations; (ii) expected to commence in early 2016. Contracts fencing repairs at Fua’amotu; and (iii) a Training for the VSAT design, supply and installation are in Needs Analysis with budget available to the State place and it is expected that this will be completed for implementation. Navigational aids and commu- in 2016, which was procured as a regional good. nications contract is in place and the supply and The procurement of goods and services is under- installation is planned in the first quarter of 2016. way for modernization of air traffic communica- Contracts for the VSAT design, supply and instal- tions. Also completed is the assessment and spec- lation are in place and it is expected that this will ifications of rescue fire service vehicles; upgrading be completed in 2016, which was procured as a of the airfield rescue and fire-fighting compliance regional good. The terminal renovation for Fu- category will be achieved after a regional procure- a’amotu International airport and the tanktainer to ment for vehicles is tendered. An ADS-B Imple- support refueling operations in Vava’u for regional mentation Coordinator is supporting equipment flights are also planned for 2016. Also completed and equipage needs, in preparation of a regional is the assessment and specifications of rescue fire rollout of ADS-B, to be procured as a regional ac- service vehicles; upgrading of the airfield rescue tivity. Other activities underway include the Train- and fire-fighting compliance category will be ing Needs Analysis, and development of a Person- achieved after a regional procurement for vehicles nel Licensing System. An increased use of PASO is tendered. An ADS-B Implementation Coordina- services has been facilitated through PRIF. An Ad- tor is supporting equipment and equipage needs, ditional Finance (IDA Credit) is under considera- in preparation of a regional rollout of ADS-B, to be tion to substitute the European Investment Bank procured as a regional activity. Ministry of Infra- contribution and to scale up apron pavement ex- structure and Tourism has contracted an Aviation pansions and fuel hydrant extensions that result Advisor to support with regulatory and policy guid- from GoS decisions to construct of a new terminal ance. building. A Regional study to develop the PASO Business Contact person is Christopher De Serio at Development Plan and organizational re-structure [email protected] or Christopher Bennett at has been completed, financed by PRIF, and an [email protected]. increased use of PASO services has been -

facilitated through the allocated PRIF budget. The ment for vehicles is tendered. An ADS-B Implemen- regional study on the Flight Information Region and tation Coordinator is supporting equipment and equi- Upper Airspace management, financed by PRIF, has page needs, in preparation of a regional rollout of been completed. An increased use of PASO services ADS-B, to be procured as a regional activity. An in- has been facilitated through PRIF. An Additional Fi- creased use of PASO services has been facilitated nancing (IDA Credit) is currently under consideration through PRIF. Additional Financing, in the form of an and will focus on construction of a new Air Traffic IDA Grant, is currently under consideration, with the Control Tower (2017/18). objective to accommodate cost overruns on the new terminal design and fire rescue vehicle. Contact person is Julie Babinard at [email protected] or Pierre Graftieaux at Contact person is Christopher Bennett at [email protected]. [email protected] or Christopher De Serio at [email protected].

TUVALU Tuvalu Aviation Investment Program (P128940)

With IDA Grant contributions of US$11.85 million and US$6.06 million, the project is in the fourth year of a five-year implementation period. The AU$5 Safety and Security Levy on departing international passengers has been successfully implemented and is being collected, which represents a major policy achievement that will result in increased fiscal resources towards safer and more secure air transport operations. Further, Tuvalu has taken the necessary institutional steps for restructuring government depart- ments with the separation of regulatory oversight from airport management within the Ministry of Com- munications and Transport. Key activities that have been completed include: (i) the civil works to resur- face the Funafuti runway and Funafuti roads; (ii) a Training Needs Analysis, with the related budget in place for State implementation and the tendering of the new terminal, for which the construction has been planned to commence in 2016. The navigational aids and communications contract is in place, and the supply and installation is planned for the first quarter of 2016. Contracts for the VSAT design, supply and installation are in place and it is expected that this will be completed in 2016, which was procured as a regional good. Also completed is the assessment and specifications of rescue fire service vehicles; upgrading of the airfield rescue and fire-fighting compliance category will be achieved after a regional procure-

VANUATU procurement for vehicles is tendered. An ADS-B Im- Vanuatu Aviation Investment Program plementation Coordinator is supporting equipment (P154149) and equipage needs, in preparation of a regional rollout of ADS-B, to be procured as a regional activi- The project is in the first six months of implementa- ty. The Airport Master Plan and Aviation Sector Plan tion, having been prepared as an emergency opera- TORs have been developed and tendering is ex- tion, with an original IDA Credit contribution of pected to commence in early 2016. A National Pro- US$59.5 million. Completed activities include the ject Manager is under recruitment. The VSAT design, pavement coring and deflection testing, as well as management and equipment supply and installation temporary remedial works to the runway realized in is planned to commence in 2016. PRIF funds have order to ensure safe operations at Bauerfield interna- been made available to the state in order to facilitate tional airport, in Port Vila. A desktop review has been the use of PASO services. completed to confirm the relevancy of the project investments for future aircraft operating types. The de- Contact person is Christopher Bennett at sign of the Bauerfield runway rehabilitation has been [email protected] or Christopher De Serio at progressing and will be finalized in early 2016 on the [email protected]. basis of the future needs assessment from the desktop review. The assessment of navigation aids and communications requirements has been completed and the preparation of the tender documents is planned to start soon. Also completed is the assessment and specifications of rescue fire service vehicles; upgrading of the airfield rescue and fire-fighting compliance category will be achieved after a regional

PACIFIC ISLANDS cial Management and Sustainability Analysis, is Pacific Aviation Safety Office (PASO) under development and will propose new Reform Project (P145057) mechanisms to increase funding resources for PASO oversight services. Complementary to major capital investments undertaken through PAIP, the World Bank approved  An aviation legal expert is reviewing the PASO a US$2.15 million Regional IDA Grant in Novem- Constitution to improve State accountabilities ber 2013 to support the implementation of new and commitment to make possible recommen- business planning and processes at the Pacific dations on amending the Pacific Islands Civil Aviation Safety Office (PASO). Established in 2004 Aviation Safety and Security Treaty through the Pacific Island Civil Aviation Safety and (PICASST). Security Treaty, PASO supplements highly specialized expertise in aviation regulatory oversight  An institutional specialist familiar with execu- to ten Pacific Island Countries. However, the finan- tive management and the aviation industry will cial viability of the organization has been elusive. be developing recommendations that support a By strengthening PASO's technical and coordina- new governance framework, which shall in- tion capacity, the project aims to ensure effective clude a blueprint for implementation of the delivery of aviation safety and security oversight, agreed recommendations. and advisory services to PASO Member States.  A Communications consultant has supported The project is focused around three components, the development of project elements related to namely: (i) transitional management and support marketing and stakeholder engagement strate- for PASO, comprising technical assistance activi- gies complete. ties that facilitate implementation of its newly adopted business plan; (ii) the establishment of a Contact person is Christopher De Serio at pool of regional aviation experts available to PASO [email protected] or Christopher Bennett at member states to advise on aviation safety and [email protected]. security regulatory matters; and (iii) the establishment of appropriate quality assurance and information management systems.

Transitional arrangements to strengthen PASO’s financial viability and effectiveness are underway.

 An initial regional pool of inspectors with appropriate credentials has been identified and continues to offer available qualified personnel as may be required by Member States. Senior Regulatory Advisor has also been recruited to (i) provide interim technical guidance in the development of and adherence to the 2014 and 2015 Annual Work Program oversight regi- mens, and (ii) further build upon the established Register of Inspectors and focus on developing the Regional Program of Inspec- torates.

 A key technical assistance activity, the Finan-

BOLIVIA GRENADA National Roads and Airport Infrastructure Regional Disaster Vulnerability Reduction Project (P122007) APL1 (P117871, P146768)

The Bolivia National Roads and Airport Infrastruc- Grenada’s Maurice Bishop International Airport ture Project supports road infrastructure improve- (MBIA) functions as an important regional infra- ment in the department of La Paz and the upgrad- structure site in the region’s emergency response ing of airport infrastructure and equipment in the capacity. It is the alternate airport for Trinidad and town of Rurrenabaque in the department of Beni. Tobago, Barbados, and St. Vincent and the Grena- dines, and provides air traffic support in emergen- The investment is being used for the construction cy situations to the island of Saint Vincent. The of a new taxiway, apron, control tower, operations continued operation of the airport is therefore criti- building, rescue and firefighting buildings, an ac- cal to the region as well as to Grenada. Under the cess road, and a passenger terminal; and the ac- Regional Disaster Vulnerability Reduction Project, quisition and installation of aviation control, rescue critical investments will be financed at the airport and firefighting equipment. in order to comply with emergency response capability operational standards, as required by the In- Legacy resettlement issues have been resolved ternational Civil Aviation Organization (ICAO). In and the client, AASANA (Administración de Aero- the absence of these investments, Grenada and puertos y Servicios Auxiliares a la Navegación the region risk a downgrading of its airport certifi- Área), is finalizing updating of technical designs cation. and specifications as well as of bid documents. Procurement and consultant selection processes Currently, the airport is in the process of installing are expected to be reinitiated in February 2016. fire detection/ alarm system for the kitchen section of the facility, using its own funding. This became Contact person is Gylfi Palsson at necessary in order to meet urgent ICAO compli- [email protected]. ance requirements. The procurement of this activity is being conducted in accordance with WBG procurement guidelines though administered and managed by the MBIA. Outside of this there were no other major aviation activities during FY15.

Contact person is Tiguist Fisseha at [email protected].

EGYPT vices through a range of capacity investments and Cairo Airport Development Project – TB2 the strengthening of airport operations. (P101201) Egypt needs to continue expanding airport infrastruc- Air transport is highly strategic for Egypt’s economic ture and improve airport services to meet growing development because it creates significant employ- demand, especially at Cairo International Airport, the ment and supports the country’s tourism sector. In main gateway to Egypt. It also needs to continue FY09, tourism accounted for 3.5% of Egypt’s GDP strengthening air traffic control infrastructure and air and generated US$10.5 billion in revenue and 12.4 traffic management. million visitors. Around 80% of tourists came through Egypt’s airports, and tourists represented half of the The Cairo Airport Development Project-TB2, ap- international passenger traffic at Cairo International proved in 2010 for an amount of US$280 million, is Airport. primarily supporting the rehabilitation and expansion of the Terminal Building 2 (TB2) at Cairo International About twenty years ago, the Government of Egypt Airport, with a focus on enhancing the capacity and realized the growing importance of air transport as a the quality of services of the airport (component 1 of driver of growth in its own right. The Government’s the project). The component 2 consists of five studies objective therefore became to ensure that the liberali- of technical assistance on various topics. zation of air transport would contribute positively to the development of the Egyptian aviation sector. The project’s objectives are to (i) enhance the capac- Thus, Egypt has embarked on the gradual liberaliza- ity and the quality of services of the Cairo Internation- tion of international air services on a bilateral basis al Airport, and (ii) improve the capacity of key stake- with several countries in the Middle East, Africa, and holders (Ministry of Civil Aviation and the Egyptian Europe. It has also significantly improved airport ser- Holding Company for Airports and Air Navigation) in

the strategic planning of the air transport sector. YEMEN Port Cities Development II Project The project’s beneficiaries will be: (i) business and (P088435) tourism passengers, who will benefit from better airport infrastructure and services, (ii) businesses, The primary development objective of the PCDP II which will benefit from extended air transport ser- project is to improve the capacity of key transport in- vices and a more attractive area around Cairo Air- frastructure in the port cities of Mukalla and Hodei- port International, and (iii) workers, who will benefit dah. The aviation component seeks to gain time sav- from job creation through the construction phase ings for passengers landing and departing at Mukalla as well as after construction, through airport activi- International Airport. ties as well as activities of industries and services in the area of Cairo International Airport. The project closed on June 30, 2015. However, due to the IDA disbursement suspension on March 11, In FY15, the two project components continued to 2015, the expansion of the Mukalla International Air- move forward, despite a challenging economic se- port was only completed at 85%, and the airport re- curity environment. Component 1 (rehabilitation mains closed due to the ongoing conflict in Yemen. and expansion of TB2) has progressed but is facing significant delay, partly due to the need to re- Contact person is Sabine Beddies at vise the design of the building. As of June 2015, [email protected]. completion of TB2 was expected for the first quarter of 2016, which represents a delay of more than a year compared to the originally scheduled completion date.

As of June 2015, four of the five studies forming the Component 2 (technical assistance and studies) were completed, namely a review of air transport policy of Egypt and other strategic options, a development strategy of air traffic control infrastructure and management, an analysis of the fee and tax structure of the air transport sector, and a study on the spatial planning of Cairo’s airport area.

The fifth study, a review of civil aviation authority’s compliance with ICAO standards and recommended practices concerning regulatory oversight of safety and security remaining study, has been cancelled and replaced by a safety peer-review of Cai- ro airport. This review was funded by the Bank loan and carried out by Airports Council Interna- tional (ACI) in May 2015. An action plan in response of the review was expected to be prepared by Cairo Airport Company by the end of 2015.

Contact person is Olivier Le Ber at [email protected].

SRI LANKA ments and key factors which impact appetite for in- Development of Domestic Airports vestments from the private sector in particular. These (P146193) factors can be grouped into two areas: the first one is the overall enabling environment for private sector In order to guide the Government of Sri Lanka participation, in terms of institutional, legal frame- (GoSL) in the development of its domestic aviation work, and given the current role of Airport and Avia- sector, and in order to determine the potential for in- tion Services (Sri Lanka) Ltd (AASL) and Sri Lankan volvement by the private sector into the industry, an Air Force (SLAF) in the aviation market, and the sec- “Options Study for Private Sector Participation in the ond one is the financial viability of specific invest- Development of the Domestic Airports Sector in Sri ments, which depends on project economics and dic- Lanka” was commissioned by the Public-Private In- tates opportunities for target investment returns. Both frastructure Advisory Fund (PPIAF) of the World areas are reviewed and implications on prospects for Bank. private sector participations are outlined.

A key aim of the study is to provide elements to as- The last objective of the study is the review and ap- sess whether a strong rationale for domestic airports praise the operations of AASL in order to determine developments exists. Such rationale is meant to be insights into the body’s competitiveness, and to iden- independent from availability of funds and from insti- tify potential options for operational or financial im- tutional and regulatory constraints or challenges in provement. the industry. Instead, it is to be based on market analysis, including an estimate of demand for invest- Overall the study provides findings and recommenda- ments in domestic airports driven to support tourism tions based on both quantitative and qualitative anal- developments plans and on overall prospects for ysis and reviews issues in domestic aviation in Sri contribution to tourism growth. Lanka with the aim to support the GoSL in making strategic decisions in the aviation sector to improve In this study, the review of the domestic aviation mar- efficiency and contribution to economic growth. ket provides an understanding of existing challenges and constraints for investments. The tourism market Some preliminary conclusions include: study and the aviation traffic forecast for the coming  Tourism growth shall drive international traffic to 20 years provide the link between tourism growth and 21 million passengers by 2035 airports’ development. On the basis of all the above,  Demand for domestic aviation services expected opportunities for developments of domestic airports to grow from 135, 000 passengers to 337,472 by are assessed. 2035 (CAGR 7%)  Low levels of demand for domestic aviation fore- In the context of a market-driven approach for airport cast, compared to international air travel, signal a developments, the study reviews national airports to small contribution to tourism development identify and select some sites where the traffic fore-  Existing domestic airports do not constrain tour- cast would justify further investments, if any, also tak- ism growth ing into account the integrated transport network  No immediate infrastructure investments in do- across the country. The analysis identifies whether or mestic airports is required not existing airport facilities are likely to be sufficient  Financial viability of small airport operations is an to serve an unconstraint traffic demand in the future issue and if not, which additional investments would be re-  Addressing market distortions and improving the quired. environment for the private sector is crucial for development of domestic airports As to private sector participation, the objective is to develop considerations taking into account the do- Contact person is Amali Rajapaksa at mestic aviation market, the market need for invest- [email protected].

projects. has traditionally and companies infrastructure financed airairport carriers and Air IFC Projects: Transport

The IFC provides IFC The private financing sector to

IFC PROJECTS

IFC’S EXPOSURE (as PROJECT COUNTRY DESCRIPTION AMOUNT (USD) of End-of-FY2015) TYPE CODE USD*

Africa (Mali, Burkina AKFED Aviation: General purpose loan to 27048 $25 million $15.6 million A Loan Faso, Uganda) a regional alliance of African Airlines

Cambodia Airports: Privatization of Cambodia 21363 $10 million Project Closed A Loan Phnom Penh International Airport

Cambodia Airports II: Privatization of IFC A Loan up to Phnom Penh International Airport– re- $7.5 million, IFC Cambodia 25332 Up to $17.5 million $2.9 million quired capital and investments for ex- standby up to

pansion $10 million

IAS: Acquisition of up to 3 secondhand Dauphin N3 helicopters to provide Cote D'Ivoire 32061 $7 million $2.7 million A Loan transport services to leading oil and gas exploration and production companies

Dominican Republic 27883 Punta Cana Airport: Capacity expansion $20 million Project Closed A Loan IFC PROJECTS

IFC’S EXPOSURE (as PROJECT COUNTRY DESCRIPTION AMOUNT (USD) of End-of-FY2015) TYPE CODE USD*

Montego Bay Airport: Operation and expansion of Sangster International Air- A and B Loans port; improvement of the existing termi- $20 million (11353) $1.5 million (11353) (11353) nal and the construction of a new con- course (11353)

MBJ Phase 1 Swap: The proposed pro- Client Risk Man- ject is to provide a USD interest rate agement – Inter- swap to hedge the interest rate volatility $1.2 million (24676) $0.9 million (24676) mediation inherent in the floating rate IFC Phase 1 (24676) loans (24676)

11353, 24676, MBJ Phase II - Expansion and redevelop- $42 million; $20 million A and B loans Jamaica 24306, 26202, ment of Sangster International Airport for IFC’s own account $13.3 million (24306) (24306) 31658 (24306) (24306)

MBJ (CUTE): Financing for new Common Use Terminal Equipment (CUTE) and Baggage Handling and Screening (BHS) $5 million (26202) Project closed A Loan (26202) systems for Sangster Int'l Airport. Pro- ject closed on 06/12/2013 (26202)

MBJ ROS: The proposed project consists of the runway overlay of Sangster Inter- A and B loans $7.5 million (31658) $6.8 million (31658) national Airport (SIA) and other safety (31658) investments (31658) IFC PROJECTS

IFC’S EXPOSURE (as PROJECT COUNTRY DESCRIPTION AMOUNT (USD) of End-of-FY2015) TYPE CODE USD* IFC A Loan $80 million and Syn- dicated B loan $175 million Queen Alia International Airport: Reha- $295 million; $120 mil- 26182, 26864, $113.2 million, $21.1 mil- (26182) Jordan bilitation of both airside and landside lion for IFC’s own ac- 26685 lion, $20.3 million facilities count IFC C $40 million Cross Currency Swaps (26864, 26685)

KQ Airways: Expansion program consisting of the acquisition of 9 Boeing 787 Kenya 31650 $25 million $10.6 million Equity Dreamliner aircrafts and 10 Embraer 190 aircrafts

Buddha Air: Purchase of small aircraft

and long term working capital requirements $10 million, $6.9 mil- Nepal 27247, 31446 $3.9 million (27247) IFC A loan lion Buddha Air II: Financing to BAPL (Buddha Air Private Limited) to purchase its second ATR-72 aircraft. Investment fully repaid

Lima Airports Partnership: Financial re- Peru 24489 structuring and assistance in conjunction $20 million $16.8 million Equity with Fraport IFC PROJECTS

IFC’S EXPOSURE (as PROJECT COUNTRY DESCRIPTION AMOUNT (USD) of End-of-FY2015) TYPE CODE USD*

$236 million; $101.3 Pulkovo Airport: Financing to expand, Russian Federation 28218 million for IFC’s own $74.5 million A & B Loans develop, operate and maintain airport account

TAV Tunisia: Construction of a new air- IFC A Loan, Sub- $253 million; $184 mil- port in Enfidha, with an initial capacity of ordinated Loan, Tunisia 26913, 28076 lion for IFC’s own ac- $108.4 million (26913) 7 million passengers per year, and reha- Syndicated B count bilitation of the airport in Monastir Loan, Equity

ASECNA: Financing to enhance member Africa Region 32546 countries’ airport facilities and to rein- $36.03 million $30.8 million A Loan force air traffic security in the region.

Queen Alia II: Stage 2 of expansion and rehabilitation of QAIA consisting of de- $93.8 million; $21.2 IFC A Loan, Syn- Jordan 34536 molishing of the old terminals and an million for IFC’s own $21.2 million dicated B Loan extension of the piers with additional account and Parallel Loan contact gates

Zagreb Airport: Construction and opera- A Loan, Equity, tion of a new passenger terminal and $72.65 million for IFC’s $61.1 million (31969) and C Loan related infrastructure at Zagreb Airport own account (31969) (31969) Croatia 31969, 34380, and the existing facilities.

$1.2 million for IFC’s Client Risk Man- Zagreb Air Hedge: Interest Rate Swap $6.1 million (34380) own account (34380) agement (34380)

AFRICA: AKFED Aviation SUB-SAHARAN AFRICA: ASECNA

The Aga Khan Fund for Economic Development The Agence pour la Securite de la Navigation Aer- (“AKFED”), through its Aviation Services division, ienne en Afrique et a Madagascar (ASECNA) is a is currently expanding its activities in both East multi-state governmental agency. It was created in and West Africa. The aim of the division is to as- 1959 and is composed of 18 member countries sist in maintaining the critical aviation infrastruc- (Benin, Guinea Bissau, Burkina Faso, Cameroon, ture in support of economic development and to Central African Republic, Chad, Comoros, Congo, provide much needed regional airline services in Cote d’Ivoire, Equatorial Guinea, France, Gabon, Africa. IFC’s involvement with the organization in- Madagascar, Mali, Mauritania, Niger, Senegal, cludes a corporate loan of up to $25 million to AK- and Togo). FED for on-lending to its three airlines: Air Burki- na, Air Mali and Air Uganda. This allows AKFED to ASECNA is responsible for the design, implemen- consolidate all of the division’s airlines and avia- tation and management of facilities and services tion activities and optimize routing, synergies and related to the transmission of messages and traffic overall effectiveness across the group’s airline op- information, guiding aircrafts, air traffic control, erations. forecasting and reporting meteorological information, for traffic route, approach and landing at Loan proceeds will be used to fund fleet acquisi- airports in African members countries. It is also in tion cost (introduction of 9 refurbished MD-87 and charge of the maintenance of all facilities required 2 MD-83 aircraft) and other airline development for the implementation of these services, including costs including training of crews and engineers, the management of an airspace covering 16 mil- purchase of spare parts, and improving mainte- lion square km, with a total of 32 airports. nance facilities. IFC investment consist of an A loan of USD$38.98 The project is expected to promote inter-regional million aimed at financing a list of specific infra- and international trade in the region. Additionally, structure refurbishment including purchase and the project is also expected to provide a boost to installation of back-up power equipment in a num- tourism. Continued trade and economic growth in ber of member countries in Africa. The loan is de- Africa is contingent on further investments and im- signed to promote regional and integration and provements in regional transport infrastructure and improve air space management facilities, infra- services. The division’s operation will fill the ser- structure, and communications thus enhancing vice gap that exists today and will result in in- member countries’ safety in the air transportation creased frequencies for existing destinations as sector. well as the addition of new destinations, better passenger service and improved efficiency and safety. Such improvements will increase the connectivity, competitiveness and attractiveness of these countries’ economies. Moreover, the project will support regional integration by assisting the development and expansion of a group of regional airlines.

Zagreb International Airport

COTE D’IVOIRE: International Aircraft The expected development impact will be develop- Services ing local know-how, and support the development of exploration and production of natural gas activi- The project, which was approved in March 2013, ties by providing reasonably priced transportation provides financing of $7 million to International services. The project also hopes to create a Aircraft Services (IAS) for the acquisition of up to demonstration effect by providing financing to a three secondhand Dauphin N3 helicopters by IAS. company in a post-conflict country to pave the way The helicopters will be used to provide transport for more investments in the future. services to leading oil and gas exploration and production companies in Cote d’Ivoire and the Western African region. The project will enable CROATIA: Zagreb International Airport IAS to modernize its fleet with newer helicopters to meet its client needs. The IFC is supporting the development of a terminal at Zagreb International Airport as part of a IAS is an aviation operator and maintenance com- Public Private Partnership (PPP). The new pany created in 2002 and registered with the Ivory USD$450 million terminal, built by a consortium Coast Civil Aviation Authority. It provides mostly supported by IFC, is expected to contribute to eco- helicopter transport services to the oil and gas in- nomic growth and tourist activity. Tourism is a ma- dustry in Cote d’Ivoire and to the mining industry jor driver of employment in Croatia, and improved in West Africa. The company currently owns 13 infrastructure will develop the sector and boost helicopters and employs 25 pilots. IAS is based in GDP. IFC is committing as much as USD$73 mil- Felix Houphouet-Boigny International Airport, lion to the project, including a loan of up to which is approximately 16 km south east of Abid- USD$47 million and an equity investment of— jan.

nearly USD$26 million. The concession includes tribute to markets integration and will reduce the financing, design, and construction of the terminal, transactional costs of trade, an aspect that is ex- along with airport operation until 2042. tremely important to promote the economic development of the SSA economies. The new terminal will be 65,000 square meters and is expected to welcome 5 million travelers per KQ's entry into new international markets will also year when it opens in 2017, compared to the cur- promote competition as well as provide a key rent capacity of 2 million, a 150% capacity in- transportation link between growing economies in crease. An average of 400 new jobs are expected the Middle East and Northern Africa region and to be created during construction, and up to 700 at Asia promoting international trade, South-South peak. For the first time in Croatia, private firms Investments and tourism to and from Africa. involved in a transport concession project have assumed passenger volume risks, enabling the country to upgrade essential infrastructure without MEXICO: Vuela Aircraft Financing adding a burden to state finances. Vuela (branded Volaris) commenced operations on 13 March 2006. It initially operated five routes KENYA: Kenya Airways Expansion Plan with four aircraft throughout Mexico from its base at Aeropuerto Internacional de Toluca but has Kenya Airways Ltd. (KQ) the national flag carrier plans to grow significantly over the next decade, of Kenya and the third largest airline in Sub- with a planned fleet of 90 aircraft including Airbus Saharan Africa (in terms of seat capacity offered) 319, A320 and A320 Neo. is in the midst of implementing a strategic fleet and network expansion plan. It is focused on Vuela will provide substantially discounted fares in growing its passenger network and diversifying its a market historically marked by limited competition fleet to match the network needs, as well as and high fares. This is expected to help stimulate launching a dedicated freighter division. Having demand and make air transportation more acces- reached a critical mass and achieved a solid finan- sible for a larger share of the Mexican population, cial position, KQ finds itself well positioned to capi- promote connectivity, and economic growth. talize on the growth prospects and opportunities that the African region and the international mar- The IFC investment is an IFC revolving credit line ket present. of $30 million for the financing of aircraft pre delivery payments and a $10 million loan to Con- KQ’s strategic intent is to establish its brand and troladora Vuela Compañia de Aviación, S.A de its presence in the most important intra-African C.V. (Controladora) with Concesionaria Vuela markets as well as become a significant player in Compañia de Aviación, S.A de C.V. as the guaran- long haul origin-destination city pairs that are ex- tor (Vuela or the company), a newly established pected to grow over the next few years. To imple- low cost airline, branded as Volaris. ment the project, the company has placed firm or- ders to aircraft manufacturers in connection with the acquisition of nine Boeing 787 Dreamliner aircraft and ten Embraer 190 aircraft.

IFC's support of Kenya Airways expansion plan is expected to have significant development impact. At the regional level of Sub Saharan Africa, the launch of the freighter division coupled with the opening of new intra-Africa destinations will con-

NEPAL: Buddha Air II routes in Nepal and also the first to fly to Bhutan and to towns across the Indian border. Air connectivity is a key requirement in Nepal given its difficult terrain and poor road network. Do- The project Buddha Air II addresses two pillars of mestic airlines are needed to provide reliable and CSA strategy; (i) by facilitating passenger and car- safe air services. With tourist arrivals in Nepal go transport between India and Nepal it supports growing at 12% annually since 2006, and a greater regional integration; (ii) by enhancing transport focus on tourism revenues with GDP growing at and access across Nepal at reasonable cost, it ~4.5% p.a., the requirement for domestic tourist supports inclusion in Nepal. The project also fits airline seats is expected to grow even further. well with the FY11-13 WBG ISN which highlights connectivity and private sector growth. Buddha Air Private Limited is a closely held private limited company providing air services since 1997. IFC is providing financing of $6.9 million to BAPL BAPL currently has 357 seats across a fleet of for acquisition of a second ATR-72 aircraft which three Beechcrafts (18 seats), three ATR-42s (47 BAPL is currently operating on a lease basis. IFC's seats) and two ATR-72 (72 seats). The expansion will also help the Company enhance safety stand- to its current fleet had been partially financed by ards and undergo IATA IOSA audit. an IFC corporate loan of $US10 Million in FY09. BAPL had a 42% market share by passengers in Contact persons for all IFC projects is the first half of 2011, and was the first one to bring Harsh Gupta at [email protected]. in larger 45 seater turbo prop aircraft for domestic

The Infrastructure Advisory Services Department 2) IFC Public-Private Partnerships (PPP) Advi- of the IFC provides advisory assistance to govern- sory Mandates in Airlines ments on structuring and implementing (tendering) Public-Private-Partnerships (PPPs) in infrastruc- As the airline industry has proceeded along this ture. IFC has undertaken more than 100 advisory privatization path over the last 30 years, IFC has transactions in over 67 countries over the last 20 participated in nearly a dozen airline transactions. years. IFC/World Bank's reputation for compe- Unfortunately, many have proved to be difficult tence, transparency, and fairness allows it to play projects due to important sector-specific structural the role of neutral partner to balance each party's reasons: interest, thus reassuring foreign investors, local  Fixed-cost structure: Airlines tend to build up a partners, other creditors, and government authori- legacy-costs base (staff and fleet) that is diffi- ties cult for a new owner to manage. In addition, The two main domains in air transportation adviso- fuel costs are beyond management’s control. ry services are private sector participation in air- During the period of higher oil price in 2011- ports and air carriers. 2014, they accounted for as much as 30% of the cost base (up from 15-20% in 2009), and 1) IFC Public-Private Partnerships (PPP) Advi- have since dropped with declining oil prices sory Mandates in Airports (variations according to individual airline hedg- ing strategies). Only a fraction of the world’s commercial airports  Price-sensitive product: Demand for travel is are managed or owned by private sector entities. highly elastic, especially in tourist markets. In However, as passengers carried by air transport recessions, people forgo vacations for other has neared seven billion in 2014, and that same consumer goods. Conversely, price reductions year, more than 1/3 of all merchandise and goods increase passenger numbers dramatically. (in value) were air freighted – Public-Private-  Complicated demand chain: Customers often Partnerships (PPPs) in airport infrastructure will purchase tickets through travel agents, fre- grow to meet investment and required service quently in a package with hotel accommoda- standards. Airport PPPs are useful approaches to tions. Since airlines rely on these other actors meet both private and public sector objectives. for their sales, if there are bottlenecks else- Of the various airport PPP models available, expe- where the aviation sector suffers. rience shows that concessions and full divestiture  Overregulation: Bilateral agreements between are most effective: governments, still prevalent in many parts of  Concession Contracts (BOT, BOO, BOOT, the world, prevent competition from functioning BTO, etc.): State retains ownership of airport normally. Open skies are being adopted, but but transfers investment as well as operations not in all countries. and management responsibilities to the private sector 3) IFC Air Transportation Experience  Full Divestiture: Ownership, operations, and investment responsibilities are fully transferred When undertaking a transaction advisory man- to the private sector. date, IFC provides a one-stop solution to govern-  In certain cases, a blend of first-phase BOT ments covering all aspects of the proposed trans- followed by public offering can maximize bene- action. One of the distinguishing features of IFC’s fits value addition is its ability to balance private and In certain cases, a blend of first-phase BOT fol- public sector interests and take into account sus- lowed by public offering can maximize benefits. tainable long term economic and social effects.

Selected IFC Advisory Mandates in Airports PROJECT NAME COUNTRY YEAR MANDATE/RESULT

Jeddah Airport Saudi Arabia 2014-ongoing Project structuring being finalized

Taif Airport Saudi Arabia 2014-ongoing Initial due diligence is ongoing

Galeao and Confins Airports success- Brazilian Airports Brazil 2014 fully awarded to Changi and Zurich Airport led consortiums respectively

Saint Lucia Airport Saint Lucia 2013-ongoing Project structuring being finalized

Successfully awarded to TAV, Saudi Madinah Airport Saudi Arabia 2012 Oger, Al Rajhi consortium

Dili Airport East Timor 2012-ongoing Project structuring finalized

Jamaica Airports Jamaica 2011-ongoing RFQ process initiated

Successfully awarded to Aéroports de Queen Alia Airport Jordan 2007 Paris, ADIC, J&P, Noor consortium Successfully awarded to Saudi Bin Hajj Terminal Saudi Arabia 2007 Laden Group, Aéroports de Paris consortium Successfully awarded to Abuja Gate- Abuja Airport Nigeria 2006 way consortium (Airport Authority and equity partners) Selected IFC Advisory Mandates in Airlines PROJECT NAME COUNTRY YEAR MANDATE/RESULT

Air Jamaica Jamaica 2009 Awarded to Caribbean Airlines

Drukair Bhutan 2008 Strategic analysis

JAT Yugoslavia 2006 Strategic analysis

Polynesian Airlines Samoa 2005 49% sold to Virgin Blue

Awarded but cancelled by Govern- Cameroon Airlines Cameroon 2005 ment

Air Tanzania Tanzania 2002 49% sold to SAA

Kenya Airways Kenya 1996 76% sold to KLM, financial investors

GALEÃO AND CONFINS AIRPORTS

Building on a previously completed round of con- engineering and construction company, and cessions from 2011, the Brazilian Development Changi Airport Group. The winning bid was Bank (BNDES) approached IFC in mid-2012 to as- US$7.9bn, and US$2bn will be invested over the sist with the second round of airport concessions, concession term. covering Galeão and Confins airports, in cooperation with Estruturadora Brasileira de Projetos Confins International Airport, is the main com- (EBP). The National Aviation Secretary (SAC) au- mercial airport in the Belo Horizonte region, with a thorized EBP to develop the financial, engineering, population of approximately six million people. and environmental studies necessary for the two The project was structured as a 30-year conces- airport projects. In order to undertake these activi- sion, through which the O&M of assets is trans- ties, EBP and IFC signed a Cooperation Agree- ferred to the concessionaire. The concessionaire ment, with IFC focusing principally on the technical has the responsibility to provide all the necessary workstream. Both projects closed in April 2014. investments, including civil works, to meet growing demand. Confins was awarded to the Aerobrasil Galeão International Airport is located in the consortium, composed by CCR/SA, a large Brazili- southeast region of Brazil; the airport serves as a an engineering and construction company, and major air transportation hub for the country and Flughafen Zurich AG. The winning bid was region. The Galeão project was structured as a 25 US$750m, and US$1.2bn will be invested over the -year concession, through which the operation and concession term. management of assets is transferred to the concessionaire. The concessionaire is responsible for Contact persons for all IFC air transport advisory providing all necessary investments, including civil services projects are: works, to meet growing demand. Galeão airport was awarded to the Aeroportos do Futuro consorti- Ramatou Magagi at [email protected]. um, composed of Odebrecht, a leading Brazilian Alexandre Leigh at [email protected].

region of Quito. The airport replaces the the replaces airport metropolitan The Quito. the of region of development nomic eco- sustainable for driver economic key a be will project The Quito. of outside city capital km the 24 Puembo, near a airport of new construction the involves project The Contract. of Breach and Disturbance, Civil and War Restriction, fer Trans- of risks pro- the against guarantee coverage vides Each a years. for 15 are of period guarantees four remaining the while loans, shareholder their for years 14 of period a for coverage have Corporation Development HAS and Group Aecon The en- project terprise. the in investments equity tive respec- investors' the for US$225,000 and US$225,000, US$450,000, of guarantees issued also MIGA addition, In Ecuador. of Quiport Corporacion to loans shareholder respective their for Kingdom United the of Ltd. Management ADC and the States, United of Corporation Development Canada, HAS of the INC. Group Aecon the to lion mil- US$16.4 and million, US$16.4 million, US$32.8 of guarantees three issued MIGA and Ecuador. Peru in Airport New in Airport Jorge include International Chavez guarantees pro- MIGA example of recent jects Two countries. ing and develop- in centers populations rural urban underserved growing rapidly deal to with magnitude) similar (maintenance a year of are a investment needs new billion for US$230 solely for need esti- mated the given MIGA for priority an important is development Infrastructure portfolio. agency’s the of (41%) accounting share largest the for infrastructure in projects (MIGA) with sectors, of range broad Agency a in projects cover Guarantee Multilateral the Investment by provided Guarantees EQUADOR: New Airport at Quito at Airport New EQUADOR:

ad mlyet potnte, n cre- and opportunities, employment ex- to pand efforts its airport to central views as privatization government Peruvian The years. eight for extends and performance bond), the of call wrongful expropria- (the of tion Jorge risk the The against is airport, (JCIA). coverage Airport Lima's International Chavez of privatization the for posted bond performance a to for tee guaran- counter million million US$11.5 US$12.8 its of cover guarantee Germany a of with AG, Fraport provided MIGA constraints capacity as well as deficiencies which safety from Quito, suffers of city the in airport existing [email protected]. [email protected]. CarloBongianni at Contactperson forall MIGA guarantees is perimeter. airport existing the within center retail and hotel a of creation and taxiways, con- and aprons craft passenger air- new of new addition and expansion course, a of construction terminal, current the to upgrades including infrastructure, new in million US$130 invest over to expected is conces- consortium the the of sion, years four first the During expand and goal. the enhance government key another to also tourism, will gateway to It country's world. facility the as transportation serve modern a ate

PERU: Jorge Chavez International International Chavez Jorge PERU: Airport (JCIA) Airport

sad onre, uprig cnmc de- economic supporting countries, Island Pacific in role fundamental a plays Aviation tourism. and aviation of impact development the optimize to discussion how on engaging an stimulated tations presen- The region. the in tourism for Daniel mand de- spur to undertaken and being research rent cur- described investments; Specialist, Trade Saslavsky, and tiatives ini- tourism of overview an provided cialist, Spe- Industry Senior Perrottet, John gram; dis- Pro- Investment Specialist, Aviation Pacific the cussed Transport Lead Bennett, Chris region: the in as- activities WBG various of pects on presented speakers Three activities. tourism support to and i crit- is travel dispersed air efficient and safe expanses ocean, of vast populations and islands several small across with re- remote gion a As the Islands. Pacific the with on ing focus- workshop Tourism, and Solutions Transport Air of a theme Tourism organized Group Sustainable formed newly WBG’s the and GP) (T&I Practice of Community Transport Air the 2015, May In ho- and resorts tels. leisure in regeneration, investment and urban for development, financing including airport a activities of through range industry the supports indirectly and directly (WBG) Group Bank World The developing and emerging economies. in tourist are international arrivals billion Nearly one jobs. the 11 of every half of out 1 world and of trade, percent 6 9 GDP, global represents of percent sector the from contribution economic total The world. the of in one largest the is industry Travel and Tourism The c

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range). In terms of capacity, the Pacific Islands mechanisms for increasing flight connectivity have 2,000 hotels consisting of 35,000 rooms, and (mainly through charters); and to understand the 44 internationally branded hotels operate in the potential impact and cost of such instruments and region. types of investments needed to grow arrivals from these markets. There are a number of examples of WBG involvement in the tourism sector, including the Fiji Out- A CONVERSATION WITH BRIAN PEARCE, rigger Reef Resort and Samoa’s Sinalei Resort CHIEF ECONOMIST, IATA and Spa. WBG has also advised Papua New Guin- The Air Transport Community of Practice (ATCOP) ea’s Office of Tourism and Palau to form the Sus- hosted an event with Brian Pearce, Chief Econo- tainable Tourism Unit within the President’s Office. mist of IATA in June 2015. A lively discussion at- IFC was the lead transaction advisor for the partial tracted colleagues from across the WBG including privatization of Samoa’s Polynesian Airlines. Other Transport, Trade and Competitiveness, and Cli- ongoing work include a study assessing the eco- mate Change practices. A variety of topics were nomic impact of the cruise tourism in Vanuatu and discussed including potential areas of collabora- exploring the feasibility of flight-cruise links. tion on research, particularly WBG’s proposed “Doing Air Transport” assessment tool, still in the There is a strong case to support new arrival mar- preliminary concept stage. kets, as data shows that smaller islands like Sa- moa and Vanuatu have been stagnant for the past Pearce also shared some key takeaways from the 5 years due to reduction in arrivals from core mar- Annual General Meeting (AGM) in Miami, FL. In- kets (Australia, New Zealand). The question is dustry support was reiterated for states to come to how to access these markets for a larger impact. an agreement at the 2016 Assembly for a growth neutral mechanism. The general mood was very Daniel Saslavsky described ongoing research fo- positive – it was the first time the industry was cused on promoting the Pacific market in China, able to generate enough returns to meet the cost now the world’s largest source market worth of capital. The challenge for airlines remains con- US$129 billion yearly. China has doubled out- vincing policymaking they should be making re- bound tourism since 2007, with over 100 million turns for investors. There is also a risk that the in- Chinese visitors currently traveling abroad. How- dustry appears to be anti-consumer (e.g., in- ever in the Pacific, this segment still represents a fighting over market access, Gulf Carriers). The modest share of inbound tourism (around 3 per- industry’s commitment to open skies and liberali- cent) but the market is expanding at a faster rate zation was also reiterated, the problem remains than established source markets. how to implement it. Contact person for ATCOP is Charles E. Some constraints identified by Chinese tour opera- Schlumberger at [email protected]. tors include flight connectivity, receiving capacity of tourism operators, ICT connectivity, and aware- ness and marketing in China. The Pacific com- petes with other more established destinations (e.g., Seychelles, Maldives) which already have direct charter flights from China and varying price points (e.g., the price point for Vanuatu/Samoa/Fiji is at 20,000-25,000 CNY or US$3,000-4,000; which is higher than comparable destinations).

The objective of the ongoing study is to support tourism development in select Pacific economies (primarily Samoa and Vanuatu); to understand the

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improving air transport in/to small island island small in/to transport air of improving priority the on focused Conference ics Econom- and Finance key- the at speech Guislain’s note included participation. and IFC Practice strong Global ICT and Transport the of Pierre Director by Senior led Guislain, was delegation WBG The forward. going partner porting Economics sup- a be will WBG and which of to Conference, Finance prior London Annual in ACI’s annually held be to the host ACI to inaugural forces two the joined 2015, organizations February In (ACI). its tional Interna- strengthen Council Airports to with partnership continues WBG The 7th ACI Airport Economics & Finance Finance & Economics (26 Conference Airport ACI the 7th and 2015) February (25 Symposium ACI the during place took that discussions Demp- summarizes It Paul sey. Professor with in Bank cooperation World by the of prepared Vijayakumar was Shruti PPPs and velopment post A private for cases investment. their present to airports country developing several for tunity oppor- an develop- provided symposium The airport ment. Private in (PPPs) on year’s Partnerships focused This topic. symposium development particular a highlight to aim will event the tion, addi- In facing. is op- industry the and portunities challenges, issues, main the stock of take to is with industry event transport air annual the this of objective The private of investments. facilitation and reforms latory regu- and policy needed including Africa), West (especially Africa of parts many and countries developing landlocked nations, ACI

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Public Public COOPERATION WITH INTERNATIONAL The WBG and ICAO have been working closely CIVIL AVIATION ORGANIZATION (ICAO) together on various air transport project issues. For example, in the past, ICAO has provided ICAO is the specialized air transport agency of safety and security audits and supervisory ser- the United Nations. The WBG and ICAO have a vices for WBG projects in West and Central Afri- long history of cooperation in the development of ca and the South Pacific. ICAO has also assist- the air transport sector in emerging and developed in identifying needs and priorities of air ing countries. The field of cooperation includes transport projects in a number of other countries. air transport policy, safety and security, facilitation, airport and air traffic control infrastructure, Finally, the WBG continues to foster relations and the environment. with other international partners, such as Re- gional Development Banks (e.g. Inter-American While the WGB cannot directly finance activities Development Bank, African Development Bank of ICAO, it is able to include technical staff of the or Asian Development Bank) or Regional Eco- secretariat on missions and project work. In ad- nomic Communities (e.g. European Union, Afri- dition, the WBG can fund support services by can Union or the Association of Southeast Asian the Technical Cooperation Bureau (TCB) of Nations) to engage in WBG funded air transport ICAO if these are procured in accordance with projects. the credit or grant agreement between the WGB and the client.

Several World Bank staff members are licensed In 2015, an Angel Flight mission was carried out and active pilots, certified by the US FAA and/or by Charles E. Schlumberger, Lead Air Transport European Aviation Authorities EASA. To remain Specialist and Aldo Giovannitti, Air Transport Spe- current on their pilot qualifications, they regularly cialist at the World Bank to transport a cancer pa- fly and undergo required refresher training. The tient from her treatment in Atlanta, Georgia, most rewarding way of keeping current is to en- Clarksville, to her home in the Washington D.C gage in community service by providing free air area. transportation to people of all ages whose medical needs – evaluation, diagnosis, and treatment – The WBG’s contribution, in accordance to Staff can only be met by health care facilities far from Manual 9.10, consisted of one day of administra- their homes. tive leave to carry out this rewarding community service. In the US, the not-for-profit organization Angel Flight provides timely travel to patients who cannot Contact person is Charles E. Schlumberger at withstand traveling long distances by automobile, [email protected]. rail, or bus, or who do not have the financial For more information visit: means to use suitable alternative transportation. www.angelflighteast.org. Oftentimes, transport in smaller, private aircraft can better accommodate patients whose condi- tions could worsen if exposed to the re-circulated air on commercial flights, or who need efficient point-to-point transport.

the public side on regulation and policy policy and regulation on side public (PPP). the on PPPs Partnerships support can WGB the Private Typically, Public creation the of foster to made be will continued a effort countries, infra- client aviation in in structure needs the address To navigation air and airport services. of of increase cost sharp user a in results also a This is countries. which developing many for rise, infra- challenge to of cost continues the structure levels, to low at expected is remain price around oil rates the While growth 1.5%. at struggle to ues contin- Africa while growth), recovering 4.4% (about slowly is the in America than Latin pace past. slower a at but 6.8%), in Traffic 12%). the Asia (about in East while forecasted Middle is the America, growth traffic North ex- strongest in is The performance pected regions. financial different strongest the among ied var- is 2016 for outlook the Nevertheless, aviation. on pendent de- in heavily and remote are especially that countries globe, the around development economic support to continue will This ago. years 20 to compared con- air nectivity the double more 2016, in reach 17,000 to than expected is city unique connections of revenues. number signifi- the as tax increase cantly in will connectivity billion Global $118 from fit bene- will world the around Governments in transport air on billion. $750 almost totaling spent 2016, be will 20 GDP than world of 1% about lower Globally, earlier. 61% years currently tax), and surcharges before 2016 in US$375 is age aver- on (which fares air declining uously contin- is factor driving key The years. 20 past the 2010 of trend 5.5% since the above well and forecast optimistic most the 6.9%, of growth expected accel- an with is erating, travel air for demand the for IATA, to transport According positive. air is 2016 Year for Fiscal outlook global The - Pacific will continue to grow (about (about grow to continue will Pacific

- pair pair pnil fr rud % f l green- all of 2% around re- only for is sponsible aviation that fact the despite significant, is This gases. greenhouse emitter of growing strongest the is Aviation challenges. environmental addressing as such responsibilities, strengthening governmental wider and for building oversight, capacity regulatory and entities, advice related and policy of carriers financing air systems, private control and traffic airports air as such infrastructure, aviation in investments include will These projects countries. client select development in transport projects air finance to ue contin- will WBG the eco- development, for nomic transportation air of importance the Recognizing (MIGA). guarantees of risk provision the through as well as (IFC), financing and private services the advisory with on side and (IDRB/IDA), matters banks, and bilateral partners to investmentsin aviation. to partners bilateral development and banks, regional other and with multinational cooperate will WGB addi- the In tion, building. advice capacity policy technical and providing including ACI, jects, pro- ICAO, on partners with relevant other work and IATA to WBG continue The will objectives. our achieving development for set international essential and is bilateral partners, with as industry, as transport well air the partner- with ships productive establishing Finally, as provision. service air such these improved or airports infrastructure, green of on placed is implementation focus renewed a addition, In measures. and ment develop- the in IATA and ACI ICAO, with working is WBG The 2020. in commence market global on agree stand- and aircraft new emission for ards develop will ICAO likely more that it makes Paris Climate in conference of COP21 the of outcome recent The industry. the of challenge objective declared a is Change the dressing Ad- car. small a driving than airliner an distance in per fuel average less the consumes and traveler emissions, gas house

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Photography Credits:  Front Cover, Table of Contents, Page 4, 21, 23, and 68 Vincent Tremeau/World Bank - Goma Airport, DRC  Inside Cover, Simone D. McCourtie/World Bank - World Bank Flags, 2009 Annual Meetings Opening Plenary Ses- sion  All other images belong to WBG or contributors to this report.