Hong Kong International finances third runway project
$4.5 billion loan will enable the building of a third runway and related improvements
The Hong Kong Airport Authority (HKAA), which oversees Hong Kong International Airport (HKG), has signed a five-year HK$35 billion ($4.5 billion) loan with 21 local and international banks, and will be using the funds for the three-runway system (3RS) project and other capital expenditures.
Half of the amount is a term loan of HK$17.5 billion and the remaining half a revolving credit facility. The HKAA said it launched the loan facility at HK$20 billion but extended it to HK$35 billion after “overwhelming demand” from the banks and considering future funding requirements.
Banks include China Development Bank, Sumitomo Mitsui Banking Corp., Agricultural Bank of China and The Bank of Nova Scotia.
HKAA also added that the third runway will commence operation from 2022 and the entire 3RS by 2024. The 3RS also consists of a third runway building covering 280,000 m2, 34 air bridges and 23 remote parking positions, as well as the expansion and connection of Terminal 2 to the new complex.
“We are very pleased with the financial community’s overwhelmingly positive response towards our term and revolving credit facilities amidst the coronavirus pandemic. This support demonstrates their confidence in the [airport authority] and the long-term development prospects of Hong Kong International Airport. Much more than a financial instrument, the facilities represent the global banking community’s faith in Hong Kong’s future,” HKAA chairman Jack So said.
The signing comes as Western states have condemned China’s implementation of the new National Security Law in Hong Kong. The governments say the new law will compromise Hong Kong’s one country-two system policy and the territory’s autonomy.
The HKAA has extended financial support to the airline community, such as a full waiver of parking and airbridge fees for idle passenger aircraft and a reduction of passenger aircraft landing charges. It also offered a sale and leaseback scheme of ground support vehicles for airlines, worth HK$2 billion.