Fraport AG Frankfurt Airport Services Worldwide (“Fraport”) owns and operates the Frankfurt Airport in Germany, the seventh largest airport in the world and second largest airport in Europe. Fraport also operates the Frankfurt Hahn, Hannover, and Saarbrücken airports in Germany, the Antalya airport in Turkey, and JCIA in Peru. Frankfort-managed airports handled a combined 77 million passengers and 2.2 million tons of cargo in 2004. Fraport also provides services such as traffic and terminal management, ground handling, security, and real estate and facility management at various airports around the world. Fraport’s investment in the company is protected by an investment guarantee from the Multilateral Investment Guarantee Agency (“MIGA”), a World Bank group company.

The total project cost is estimated at $115 million. IFC is exploring a possible cooperation with the company and Fraport to finance part of the project.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	20.0

* These investment figures are indicative

JCIA was built in 1965 and is located 12 kilometers west of Lima, Peru. JCIA’s single runway is 3,500 meters long and 45 meters wide and meets ICAO Code 4E requirements. The airport has a total of 23 gate positions, including 7 gates served by passenger loading bridges.

The project supports Peru’s efforts to improve the quality and efficiency of infrastructure services. As Peru’s primary airport for international and domestic travel, JCIA is an integral part of the country’s economic and tourist infrastructure. IFC’s investment will help ensure that LAP make necessary investments in the airport. This would improve aviation services in Peru and help JCIA develop its potential as a regional hub for passengers traveling in South America and significantly benefit the Peruvian economy and tourism industry. Fraport’s management will bring airport operation and management know-how and result in an upgrading of skills of the local workforce. Finally, the Project’s success will encourage foreign investments and further private sector participation in other airports and infrastructure sectors such as roads and ports.

IFC’s participation would encourage other parties (private equity and pension funds, financial investors) to invest in the Company. IFC will also provide long-term financing necessary to:

- create a more stable long term capital structure and
- complete the required investments under the concession.

IFC could also act as a catalyst for additional financing through the B Loan program, if needed

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. IFC’s review of this investment drew upon the results of the World Bank’s Multilateral Investment Guarantee Agency’s (MIGA) original appraisal (conducted in 2002 in support of MIGA’s guarantee of Fraport AG’s equity investment in LAP), as well as MIGA’s ongoing supervision and monitoring of LAP’s compliance with World Bank Group safeguard policies (including an August 2005 visit by MIGA staff). Environmental and social issues associated with this project include: Subsurface contamination; Air emissions; Solid waste management; Liquid effluents and sewage discharge; Fuel/Hazardous materials storage and handling, including emergency response; Asbestos-containing materials; Aircraft noise; Employee health and safety; EHS management systems; and Impacts of potential expansion. MIGA’s ongoing monitoring of LAP’s environmental and social performance confirms that the Company continues to demonstrate that its activities comply with environmental corrective action program (ECAP) requirements of the MIGA guarantee, as well as with the Company's existing loan agreements with KfW and OPIC, which specifically require compliance with the ECAP and applicable World Bank Group policies and guidelines.