Bulgaria's govt grants Sofia Airport concessionnaire 10-yr fees deferral

Bulgaria's govt grants Sofia Airport concessionnaire 10-yr fees deferral

Bulgaria's government said on Wednesday it approved a request by SOF Connect, an international consortium which runs Sofia Airport, to defer the payments of the annual concession fees due for the first ten years of the 35-year concession contract.

At the same time, Bulgaria will receive 660 million levs ($401.4 million/337.4 million euro) as an initial concession payment in April, the government said in a statement, quoting transport minister Rosen Zheliazkov.

In July, the SOF Connect consortium won a tender for the airport's concession with a proposed payment of concession fees of at least 24.5 million euro per year and planned investments of 608 million euro over the duration of the contract. France-based investment firm Meridiam Eastern Europe Investments is leading the consortium that also includes the operator of Munich Airport.

Last month SOF Connect said a deferral of the payments of the agreed annual concession fees due for the first ten years of the contract to the last ten years was absolutely necessary in order to maintain the financial stability of Sofia Airport and to its large-scale investment programme.

The losses sustained by Sofia Airport due to the sharp drop in air traffic in the January-February period alone amounted to 11 million levs, Zheliazkov also said.

Passenger numbers at Sofia Airport declined 53% year-on-year to 127,160 in March, while aircraft take-offs and landings decreased by 35% on the year to 2,210, the latest data published on the airport's website shows.

Eight banks, including four international financial institutions - the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Black Sea Trade and Development Bank and the World Bank Group, have confirmed their readiness to back the concession of Sofia Airport, Zheliazkov also said.

In October, the EBRD said it is considering providing a project finance loan of up to 85 million euro ($101.1 million) to SOF Connect to support the concession of Sofia Airport. The project finance loan will be a part of a wider debt package worth 250 million euro, provided jointly with other international financial institutions and commercial banks, the EBRD also said at the time.

At the end of March, SOF Connect said it is sticking to its commitment to attract immediately over 900 million levs in long-term investment to the country despite the Covid-19 crisis.

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