By Xinhua
Manila : The Asian Development Bank (ADB) is making its first foray into the airport business in China, said the Manila-based lender.
The project will involve a $50 million equity investment from ADB in HNA Airport Holding (Group) Co. Ltd., a private company primarily invests in airports and airport operations.
ADB is co-investing in HNA Airport Group with funds managed by Pacific Alliance, including ARC Capital Holdings Ltd. and Pacific Alliance Asia Opportunity Fund Ltd., said the multilateral development finance institution in a press release Friday.
The investment will assist HNA Airport Group secure the confidence of international investors and attract more funds to continue expanding in the airport sector.
While the company has already achieved significant success and has established a sound reputation in the industry, it is still at the onset of its planned expansion.
The project will support HNA Airport Group’s expansion and capital expenditure plan to privatise, rehabilitate, expand, upgrade and operate small and medium-sized airports in the less developed central and western regions of China, ADB said.
“Private sector participation accompanied by funding and experience is clearly needed in the development of the airport sector in the country, especially in the central and western regions,” said Sherwin Pu, investment specialist of ADB’s Private Sector Operations Department.
“The country currently has the second largest civil aviation market in the world, after the US. The demand for travel, for both work and leisure, is projected to increase at an unprecedented pace due to increased labour movement flexibility and disposable income growth,” said the specialist.
China’s air passenger transportation throughput, measured in revenue passenger-km, will grow 8.4 percent annually during 2007-2026, while air cargo transportation turnover, measured in freight tonne-km, will increase at an annual rate of 10.5 percent, ADB said.
In 2006, the country had 146 civil airports in operation. The government’s 11th Five-Year Plan (2006-2010) requires the construction and expansion of some 60 airports, mostly in the western region.
Some $17.7 billion in capital expenditure is needed for civil airports under the 11th Five-Year Plan.