Airport Economics & Strategy

• Tbilisi International Airport is the only commercial airport in Georgia
• The project includes the investment in infrastructure in a second airport, without any responsibility on the operations
• The construction program of the new terminal is very ambitious: 12 months

Project duration

• Jan - Jul 2006

Services provided by Lufthansa Consulting

• Review the concession agreement and bring to the attention issues requiring clarification or amendments
• Review the traffic projections and analysis undertaken
• Provide an economic analysis of the proposed scheme, including sensitivity analysis, with the principal variables being construction costs and traffic
• Investigate the reasonableness of construction costs to the program work
• Assess and clarify the regulatory framework on the principal sources of revenue
• Provide inputs to the financial model
• Provide assistance during negotiations

Project description

Tbilisi International Airport is Georgia’s main international gateway. Passenger traffic has recorded a significant increase (26.4% in 2004). Since October 2005, the airport has been concessioned to a consortium under a BOT scheme for a period of 15½ years. The total project cost is estimated at US $ 76.5 million, and the construction works are estimated to last 12 months and be done by December 2006.

The consortium is to provide an equity contribution of 30 %. The rest is to be financed by a group of banks, including EBRD. EBRD engaged Lufthansa Consulting to assist in the due diligence necessary to determine if financing of the scheme is feasible, and to determine covenants to be included in the loan documents.