13:11 28.04.2017

Odesa mulling attraction of loan from EBRD to build runway at airport

2 min read
Odesa mulling attraction of loan from EBRD to build runway at airport

Odesa City Council is mulling the possibility of attracting a loan from the European Bank for Reconstruction and Development (EBRD) to build a runway at Odesa airport, Odesa Mayor Hennadiy Trukhanov has said at a meeting of the executive committee of the city council.

He said that the situation with the runway does not suit the city, as the solving of the issue to build the runway or reconstruct it has been delayed for years. It is unknown when it is solved, he said. Odesa is considering a possibility of raising a loan to build own runway. Preliminary meetings have been held.

"This is an interesting and attractive asset, where the EBRD could approve for us," Trukhanov said.

As reported, in early July 2011 Odesa City Council agreed to participate in joint venture Odesa International Airport LLC, which was created to reconstruct municipal enterprise Odesa International Airport. The second participant in the JV was Odessa Airport Development Ltd. with a charter capital of about UAH 1,000. The share of Odesa City Council in the joint venture was 25%, while the city council injected property worth UAH 118.4 million into the charter capital of Odesa airport. The charter capital of the joint venture was required to be UAH 473.4 million. The remaining part was to have been injected by the private company.

However, construction work was carried out using funds received under a credit where the property of the municipal enterprise was used as collateral. The investor refused to reconstruct the runway, and the Infrastructure Ministry said that the required funds of over UAH 1.6 billion will be provided from the national budget or borrowed under government guarantees, however the funds were not provided.

From 2014 through 2016, the prospects for reconstruction and development of the airport were unclear due to investigations by Odesa Regional Prosecutor General's Office and Ukrainian Prosecutor General's Office into the circumstances of the transfer of the airport to the joint venture.

In January 2017, Ukrainian President Petro Poroshenko said that a fund with borrowed funds and budget financing to reconstruct the Odesa airport should be by the end of this year. In February 2017, Ukrainian Infrastructure Minister Volodymyr Omelyan said that there are plans to start reconstruction of the Odesa airport's runway in 2017.

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