Sofia, Bulgaria, July 31, 2020 —IFC, a member of the World Bank Group, is supporting the Ministry of Transport of Bulgaria with a public-private partnership (PPP) agreement to improve Sofia Airport's operations and services to passengers and finance significant upgrades to its infrastructure, including building a new terminal under a concession model.
The concession agreement between the Ministry of Transport and SOF Connect, a project company established by Meridiam Eastern Europe Investment, which includes Munich Airport and Strabag, was signed on July 22, 2020. This is the first major airport-sector transaction to close amidst the global pandemic that has grounded many of the world´s commercial planes.
IFC was the lead transaction advisor, helping the government of Bulgaria to competitively tender the first major PPP project in Bulgaria over the last decade in accordance with best international practice. The project was implemented in cooperation with the European Bank for Reconstruction and Development (EBRD) with funding from the Global Infrastructure Facility, a multi-donor fund created to support public-private partnerships.
The public-private partnership model is expected to contribute to Bulgaria's economic development by stimulating tourism growth and increasing international trade. This will enable a higher quality of service for passengers and improve the efficiency and quality of cargo handling services. The increased passenger and cargo traffic are projected to have positive spillover effects on the entire economy.
Under the PPP model, the private sector is responsible for improving the airport's operations and quality of service and financing upgrades of the airport's infrastructure over 35 years before transferring it back to the government.
"This landmark project marks the first major airport-sector transaction to close since the Covid-19 pandemic hit the region," said Wiebke Schloemer, IFC's Regional Director for Europe and Central Asia. "It is also the first PPP project under the new Concession Law that is expected to further support the development of the private sector in Bulgaria."
IFC has helped governments around the world to competitively tender five airport concessions that benefit over 20 million passengers and attract over $5 billion in private investment to those countries. IFC is currently advising governments on five new airport concessions in Asia, Eastern Europe, the Middle East, and the Caribbean.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2019, we invested more than $19 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org .
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For more information about Global Infrastructure Facility, visit: https://www.globalinfrafacility.org/
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