26202 - MBJ (CUTE)

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Summary of Proposed Investment

Project Number

26202

Company Name

MBJ Airports Limited

Date SPI Disclosed

Aug 2, 2007

Country

Jamaica

Industry

Infrastructure

Projected Board Date

Sep 3, 2007

Status

Completed

Sector

Other Support Activities for Transportation (Grain Terminals, Cargo Terminals, Airport Operations)

Department

Gbl Infrastructure & Natural Resources

Environmental Category

C - No Impact

Previous Events

Approved : Dec 3, 2007
Signed : Aug 5, 2008
Invested : Aug 18, 2008

Project Description

The proposed project is to provide new Common Use Terminal Equipment (CUTE) and Baggage Handling and Screening (BHS) systems for Sangster International Airport (SIA), Montego Bay Jamaica. This would include electronic check-in desks, gate podiums, baggage screening equipment and related systems and would increase both the number of check-in desks available to passengers and the operational efficiency of the airport. SIA is currently operated by MBJ Airports Limited (MBJA) under a 30-year build, operate and transfer concession granted by the government of Jamaica (GOJ). As the principal gateway for tourists visiting Jamaica’s major resorts, SIA is of particular importance to the country’s tourism infrastructure. As a result, the GOJ has made its expansion and modernization a high priority. By the end of the project (and other related work already underway), SIA’s annual handling capacity will have been boosted to 7 million passengers per year, eliminating capacity constraints for the foreseeable future.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.0
Equity

Development Impact

The concession contract includes performance standards to ensure that SIA is operated at the highest levels of service to all stakeholders (carriers, tenants and users). YVRAS’s participation brings its airport operation and management know-how to Jamaica, with an ongoing transfer of skills to the local workforce. The continued success of this high profile project will encourage other foreign investments and further private sector participation in airports, roads and ports. It will also contribute to the further improvement of the infrastructure necessary to develop the tourism industry in Jamaica, a key sector for the economy.

The cost and complexity of incorporating a new lender into the existing legal structure, combined with the urgent need to complete the project to meet its tight implementation deadlines, have led the company to approach IFC for financing. Another financial institution would need time to:

- understand the existing legal and regulatory structure and documentation and MBJ''s operations and performance; and
- work with the government, the sponsors and IFC to obtain approval for a new structure and security sharing arrangements.

Although the economic situation has continued to improve in Jamaica, long-term financing is still relatively difficult to obtain on reasonable terms from commercial banks particularly for specialized sectors such as airport financing. In comparison, IFC’s knowledge of the sector, our long-term perspective and time-horizon and ability to help mitigate political and/or regulatory risks, if needed, add significant value for the sponsors.

Because this new investment activity has no incremental environmental or social aspects or impacts, no further appraisal will be necessary. IFC will continue to supervise performance under the framework established by the original investments. IFC’s ongoing review and supervision of the existing category B investments in MBJ confirms the company is continuing to meet its environmental, health and safety, and social compliance obligations, including compliance with the applicable and relevant IFC Performance Standards. MBJ’s most recent Annual Monitoring Report provided adequate assurance of environmental and social performance, and there are no outstanding follow-up actions. The current Environmental and Social Risk Rating (ESRR) for the project is B – 1 – Good.

Contacts

For Inquiries About the Project, Contact

Prince Nweke, Chief Financial Officer
MBJ Airports Limited
Sangster International Airport
Montego Bay
St. James
Jamaica WI

Phone: (876) 952-0249
E-mail: pnweke@mbjairport.com

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

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