Lima Airport Partners S.R.L.

Summary of Proposed Investment

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. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number	24489
Company name	Lima Airport Partners S.R.L.
Country	Peru
Sector	Transportation and Warehousing
Environmental category	B
Department	Infrastructure
Status	Active

Date SPI disclosed	July 10, 2006
Projected board date	August 30, 2006
Previous Events	Invested: May 30, 2008 Signed: June 18, 2007 Approved: May 3, 2007

View Environmental & Social Review Summary (ESRS), click here

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

Lima Airport Partners S.R.L. (LAP or the company) owns a build-operate-transfer concession to operate the Jorge Chavez International Airport (JCIA) in Lima, Peru. JCIA is the only commercial airport serving Lima and is Peru’s primary international airport, serving the vast majority of Peru’s international passengers. It is also the principal hub for domestic routes in Peru. In 2004, JCIA handled 5.1 million passengers and accounted for an estimated 64% of total air passenger traffic in Peru. The project is to help LAP streamline its shareholding structure, refinance existing debt, and finance its 2006-2008 capital investment plan.

Anticipated development impact of the project

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 expected development contribution

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

Environmental and social issues - Category B

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.

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