AfDB Invests €70 million in Senegal’s New Airport Project
Tunis, 23 December 2010 - The Board of Directors of the African Development Bank (AfDB) approved on Friday 17 December 2010 in Tunis, a €70-million senior loan to finance construction of the Blaise Diagne International Airport on a new site located 45 km east of Dakar in Senegal. The Project is estimated at €525 million of which €379 million will be financed with senior loans.
In addition its senior lender role, the AfDB also acted as Mandated Lead Arranger (MLA) for the conventional financing tranche and facilitated €140 million additional senior loans. The Islamic Development Bank (IsDB) has similarly been acting as MLA for the IsDB tranche. Both lead arrangers have demonstrated strong commitment to improve the project structure. Through the partnership, over €220 million additional senior loan facilities will be mobilized.
The new airport will meet international air transport regulations both in terms of security and quality infrastructure, and will create space for related industrial activities such as aircraft maintenance. It will have a 3 –million annual passenger capacity and 80,000 aircraft movements, which will relieve the air and road congestion at the existing Dakar airport. The project is designed to provide a long-term solution to traffic management in Dakar and supports the Senegalese government’s strategy for decongesting Dakar peninsula and to promote the development of neighboring regions through a modern and secure state-of-the-art airport facility.
The Project will also create jobs, develop skills and build capacity among the inhabitants in the surrounding communities through international airports management expertise transfer during the construction and operation period. On completion, the airport will create opportunities for direct and indirect employment. It will engage some 427 full-time employees during the operational phase, including 197 females. In addition to direct employment at the airport, the project will require other services in engineering, spare parts, information technology and services, catering and cleaning, that will boost the local economy.
Other socio-economic benefits include higher income generation and revenue collection, economic transformation of the project area and accompanied amelioration of household livelihoods; emergence of small and medium enterprises; attraction of national and regional businesses, investors, and a rise in Senegal’s tourism potential. The AfDB remains a committed partner of the Agence de Promotion des Investissements et Grands Travaux with regards to the development of environmental and social activities. The Environmental and Social Management Plan and particularly the Resettlement Action Plan were jointly developed in compliance with the Bank’s policies and best practices as well as Senegalese standards.
The Project is well aligned with the AfDB’s mandate to support modern infrastructure development in Africa as well as the government’s priorities and strategy. Furthermore, it will enhance trade, economic growth and regional integration. The Project is economically and financially viable, and environmentally sound.
The Project is also in line with AfDB’s Private Sector Operations Strategy as it promotes the participation of private investors in the financing of an infrastructure project in a low-income country. It will be the second Public-Private Partnership (PPP) project in Senegal financed by AfDB after the Dakar Toll Road initiated during the second quarter of 2010. More recently, the AfDB approved senior loans to Senegal, including two base-load power plants and port extensions.
Furthermore, the Project conforms to the objective of the New Partnership for Africa’s Development (NEPAD) which promotes private sector operations in infrastructure funding. The AfDB’s support to the AIBD and to others PPP projects particularly helps relieve the pressure on public financial resources and ensures that projects are managed according to high performance standards.