The European Investment Bank (EIB) is providing a EUR 500 million loan to the People's Republic of China for the expansion of the Beijing International Airport.
Philippe Maystadt, President of the European Investment Bank, and Li Yong, Vice-Minister of Finance, signed the loan contract at the 8th EU -China Summit celebrated in Beijing.
«The partnership between the EU and China is based on mutual interest» said Maystadt. «This loan is a landmark transaction for the EIB, especially because it is explicitly supported by the unanimous decision of the 25 Ministers of Finance of the EU. We expect increasingly safe air traffic across the Euro-Asian continent and must put in place the necessary modern infrastructure. The EIB is proud to bring about a tangible European contribution to China, and to the global community, in view of the Beijing 2008 Olympic games, » he added.
The project includes the design and implementation of a third runway, a new passenger terminal, as well as the associated infrastructure. It will almost double the airport's capacity from currently 35 million passengers per annum. The expansion of the airport is needed to address the increasing congestion of the existing infrastructure and to safely handle the significant growth in traffic. The project completion is expected early in 2008.
The EIB loan will cover about 20% of the total investment cost. Its term will be 25 years and it will include a 5-year grace period. Beijing Capital International Airport Company Ltd. (BCIA), a Sino-foreign joint-stock company owns and operates the Beijing Capital Airport. Aéroports de Paris, operator of several airports in France, owns 7% of BCIA and is its technical advisor since 2001. The lead-shareholder is Capital Airports Holding Company, a state-owned company under the direct authority of the Civil Aviation Administration of China.
This is the first loan provided by the EIB beyond the amount already allocated under the third mandate for projects in Asian and Latin American countries (ALA) in the period 2000-2007 (EUR 2.48 billion). It could be envisaged because of the strong creditworthiness of the borrower and because the amount exceeds the resources still available under ALA III.
Outside the EU, the Bank contributes to the European development co-operation policy in some 120 countries in Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America. Since 1993 the EIB has carried out three successive lending mandates for Asia and Latin America as part of the EU cooperation policy with transition and developing economies. The ALA I mandate consisted of EUR 1025 million for the period 1993-1996; the ALA II mandate was of EUR 900 million for 1997-1999. Under the three successive mandates the EIB has so far extended over EUR 3.5 billion in more than 80 loans in about 20 ALA countries.
In the People's Republic of China the EIB has helped to finance three other projects:
- 1995: PING HU oil and gas development (EUR 55 million)
- 1999: CHENGDU drinking water treatment plant (EUR 23 million)
- 2001: GUANGXI toll expressway to Vietnamese border (EUR 56 million).