The European Investment Bank is providing a USD 23 million (some EUR 26.4 million) (1) loan to Aeronautical Radio of Thailand Ltd. (Aerothai) for an air traffic control system at the Second Bangkok International Airport (SBIA).
SBIA, located at Nong Ngu Hao 25 Km east of Bangkok, will be able to serve 35 million passengers at the opening at the end of 2004. It will accommodate future traffic growth, since the existing airport has arrived at maximum capacity and constraints inhibit its expansion. EIB funding for the project concerns the construction of an air traffic control complex and the procurement of ATC communication, navigation, and surveillance systems, together with network and airline communication systems. The total cost of the project is estimated at some EUR 68 million. The Kingdom of Thailand guarantees the EIB 15-year loan (including a 4-year grace period).
The project aims at enhancing communications between Thailand and the European Union, as well as at stimulating regional development and integration. Aerothai is a state enterprise, 91% owned by the Thai Government, which provides air traffic services (e.g. approach control, aeronautical communications, air navigation and control) in Thailand, in part of the South China Sea and in the upper airspace of Cambodia. The remaining 9% of the share capital is held by 64 member airlines, among which are Air France, Alitalia, British Airways, Cargolux, Lufthansa, Finnair, KLM, Lauda Air, Olympic Airways and SAS.
The loan is provided in the context of the EU co-operation policy with third countries. In Asia and Latin America (ALA), the EIB may lend up to EUR 2.48 billion during 2000-2006 to support: capital investment projects implemented by subsidiaries of EU companies or joint-ventures between EU and ALA firms; investment that results in environmental improvements or fosters regional integration.
The EIB was set up in 1958 to finance investment furthering EU integration. It lends for regional development, infrastructure, energy, industry and environment. Outside the EU, the Bank contributes to the European development co-operation policy in some 130 countries in Central and Eastern Europe, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.
In 1999, the EIB provided loans totalling some EUR 32 billion, of which EUR 4 billion for projects outside the EU. The Bank borrows on the capital markets the funds for its lending. Its bonds have regularly been rated "AAA" by the leading rating agencies. The EIB works on a non-profit basis and can pass on to project promoters the excellent conditions it obtains on the markets. The EIB may finance up to 50 percent of project cost. On average it provides one third of the funding and co-finances investment with other institutions.
(1) 1 EUR = 0.95 USD, 0.64 GBP