TAV to invest in Madinah Airport to boost capacity

ISTANBUL

Airport operator TAV Havalimanları will participate in additional investments in Madinah Airport that will increase its capacity, the company has said in a filing with Borsa İstanbul.

The annual passenger capacity of the airport will increase from 8 million to 18 million in two phases.

“As a 26 percent shareholder of the SPV (TIBAH Development) with the concession rights to Madinah Airport, our board of directors has resolved to participate in additional investments into the airport,” TAV said.

The total investment amount planned for the two phases, for 100 percent of the SPV, is $275 million, and the amount corresponding to TAV Airports' share of 26 percent is $71.5 million, the company explained.

The investment program is planned to begin during the first half of 2024 and is planned to be completed in 2027, it added.

“A 'Heads of Terms' agreement has been signed for the first phase of this investment program to build a new domestic terminal, which is expected to cost $175 million.”

In the second phase, which is expected to cost $100 million, the terminal currently in usage will be developed and converted into an international terminal, and ancillary facilities, such as new connecting roads, utility lines, a car park and an administration building will be constructed, the company said.

The investment is expected to be financed with 70 percent debt and 30 percent equity, according to the statement.

TAV forecasts that the airports it operates will serve between 100 million and 110 million passengers this year, up from 93.3 million passengers in 2023.

The company expects its revenue to exceed 1.5 billion euros in 2024, rising from 1.3 billion last year.