Avianca is wholly owned by Synergy Aerospace Inc., through its Colombian subsidiaries, Synergy Ocean Air Colombia S.A. (94.95% ownership) and Synergy Ocean Air Colombia 2 S.A. (5.03% ownership). Synergy Aerospace Inc. is owned by Synergy Aerospace Corp. which is owned by the Synergy Group (Synergy). Synergy is incorporated in Panama and is part of a major Latin American conglomerate (with operations in Brazil, Colombia, Ecuador, the United States and Peru) that was founded in 1982. The group is active in the following sectors: power generation, aerospace, shipyard, oil and gas (provision of services and production) and telecom. The consolidated revenue of the group in 2007 is estimated to exceed $2.4 billion. In addition to Avianca, Synergy owns the following airlines: Ocean Air in Brazil and VIP in Ecuador.

The proposed IFC investment includes a $50 million corporate loan to the company and its subsidiaries to help finance the implementation of the company’s fleet renewal program.

50.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity

* These investment figures are indicative

Avianca is headquartered in Bogota, Colombia.

The support of IFC is essential for the company to continue its fleet renewal plan to achieve greater efficiency and profitability. Avianca is of significant importance as an integral part of the country’s transport and economic infrastructure. The company provides essential air transportation services in Colombia, where the country’s topography and the long distances between cities makes air transportation vital, particularly given Colombia’s inadequate passenger rail infrastructure. The Project will promote domestic and international trade and tourism, facilitate business expansion and generate further business and investment interest within Colombia. Moreover, Avianca’s wide network and coverage of cities throughout Colombia would further enhance access to remote areas, thereby aiding their economic development.

The commercial market has a limited appetite to fund particular needs such as medium term loans for the implementation of a fleet renewal program that includes the acquisition of engines, spare parts, training devices and training costs for pilots and crew. IFC’s proposed investment meets the financing requirements of Avianca for the above-mentioned costs related to the implementation of its fleet renewal program. In addition, through its proposed investment in Avianca, IFC is supporting a former legacy carrier that has emerged from Chapter 11 restructuring since several years ago and is in the process of transforming itself into a modern and efficient carrier.

This is a Category B project because a limited number of specific environmental and social impacts may result from the fleet expansion and modernization. Avianca is registered and certified under the IATA Operational Safety Audit (IOSA), is ISO 9001 certified, and will develop an integrated Environmental Management System by end 2008. The Company maintains detailed manuals with respect to air and ground operations to ensure compliance with the requirements of the Colombian Civil Aviation Authority (Aerocivil), the International Civil Aviation Organization (ICAO), the European Aviation Safety Agency (EASA), the Federal Aviation Agency (FAA), and the IOSA Program. Avianca is audited by both authorities and airline customers, these audits evaluate procedures related to maintenance, workshops and hangars, aircraft, and technical records. Engineering and Maintenance (E&M) policies and procedures are evaluated by authorities (e.g., Aerocivil, EASA, etc) and code-share partners (e.g., Air France, Delta, TACA, etc.). Avianca has a centralized Operational Safety Division which reports directly to the CEO. All employees (pilots, cabin crew, mechanics and ground staff) are free to unionize and have the right to collective bargaining. Colombia has adopted, and Avianca complies with, ICAO Annex 16 Noise Certification (Stage 3) requirements. No fuel is stored or handled by the Company as this is done by major oil companies contracted by the airport. No impacts are anticipated on any specific community as a result of the project. Avianca has presented plans and information to address the impacts associated with their operations, and will, upon implementation of specific agreed measures, comply with the IFC Performance Standards on Social and Environmental Sustainability.