An Austrian consultancy that has teamed up with China’s largest EPC contractor to invest in airports is looking for more partners for the vehicle.
The first consortium is likely to be announced in the coming weeks, Airport Consulting Vienna (ACV) Managing Director Johann Frank told Inframation. The vehicle – formed together with China State Construction Engineering Corporation (CSCEC) and named the Belt and Road Airport Platform – aims to invest in airport PPPs in the Belt and Road region.
The platform will be a holding company rather than a fund, Frank said, adding that it will select targets and participate in the development and sale of airports with an emphasis on value creation and risk mitigation. Its focus will include searching for investors, doing feasibility studies and evaluation, bid preparation, deal generation, the transfer of know-how and asset management.
The platform will invest in 20-30 underdeveloped airports in the next 10 years, according to an MOU. ACV will be the exclusive know-how provider, while CSCEC will be an investor and contractor, Frank said. The vehicle, which has already identified a list of airports as potential investment targets, is open to strategic and institutional investors. As of September, about 65 airports have been included in a preliminary list based on ACV’s criteria.
Frank was speaking on the sidelines of the Belt & Road Summit in Hong Kong yesterday. The Belt and Road Initiative refers to a development strategy taken by China to enhance economic co-operation among countries along the proposed Belt and Road routes. About EUR 420bn (USD 466m) will be invested in Belt and Road airports over the coming two decades, with 80 private airports to be located across East Asia (9), Commonwealth of Independent States (30), Middle East (1), South Asia (16), West Asia (12), Mid-east EU (12), according to ACV.
The platform will look to provide investors with diversified exposure to a portfolio of small and medium-sized airports developed as PPPs along the Belt and Road. A typical target will be an airport offering attractive long-term passenger growth and risk adjusted rate of return.
State-owned CSCEC is one of the world’s largest construction companies by revenue. It has more than 50 years of experience in building airports with 35 such projects globally – but mostly as an EPC contractor.
Vienna-based ACV, founded in 1992, has been involved in more than 100 airport transactions such as privatisations, PPPs and sales for operators and investors, according to its website.