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Featured Project

Brazilian Airport Concessions

LeighFisher provided sell-side advisory services to Estruturadora Brasileira de Projetos for airports in Brazil
LeighFisher provided sell-side advisory services to Estruturadora Brasileira de Projetos for airports in Brazil

Location: Brazil

During the last decade, air travel in Brazil has grown rapidly, with an approximate 6.4% compound annual growth rate between 2000 and 2011, which is among the highest in the world.  This growth placed significant pressure on the aviation system and the government to improve and expand airport infrastructure.  The pressure increased as global media organizations voiced concerns regarding the sluggish implementation of improvements to already overcrowded airports in time for the FIFA World Cup in 2014 and the Olympic Games in the summer of 2016.  In response, the government of Brazil decided to concession the development, operation, and maintenance of specific airports.  The government successfully completed two rounds of airport concessions, including São Paulo/Guarulhos, Viracopos-Campinas, and Brasília international airports in Round 1; and Rio de Janeiro/Galeão and Belo Horizonte Tancredo Neves (Confins) international airports in Round 2.  These airports accounted for approximately 45% of nationwide traffic in 2011.  Most notably, São Paulo/Guarulhos is the main international gateway to Brazil, and as the largest airport in Latin America, serves as an international hub.

In both rounds of airport concessions, LeighFisher served as a key “sell side” technical advisor in the preparation of draft bid packages for the offered airports.  LeighFisher’s client in Round 1 was Estruturadora Brasileira de Projetos (EBP), a private sector Brazilian bank focused on attracting private investment and expertise to accelerate critical investment in Brazil.  In Round 2, LeighFisher’s client was the International Finance Corporation (IFC), a multilateral financial institution offering investment, advisory, and asset management services to encourage private sector development around the world; the project was managed by a joint IFC-EBP team, with significant engagement and oversight by the state development bank, Banco Nacional de Desenolvimento Econômico e Socíal (BNDES).

LeighFisher’s analyses included traffic forecasts, master planning, regulatory analysis, and financial valuation of the offered concessions; and enabled its clients to confidently advise the government of Brazil on the structuring of the concession.  The analyses also provided guidance to inform potential investors.

The auctions for the three Round 1 airports were held on February 6, 2012 and attracted extensive interest from the global airport investment community.  For São Paulo/Guarulhos, 10 bids were received, with the winning bid at R$16.2 billion; 4 bids were received for Viracopos-Campinas, with the winning bid at R$3.7 billion; and for Brasília, 8 bids were received, with the winning bid at R$3.5 billion.

The auctions for the 25-year concessions for the two Round 2 airports were held on November 22, 2013 and again attracted interest from the global airport investment community despite the government of Brazil’s higher requirement for participating operators’ level of experience and their equity shares in the consortia.  Five bids were received for Rio de Janeiro/Galeão, including the winning bid of R$19 billion—about four times the minimum acceptable bid set by the Brazilian government—from a consortium including Odebrecht and Singapore’s Changi Airport Group.  A consortium comprising of Brazilian toll road operator CCR S.A., Flughafen Zürich A. G., and Flughafen München GmbH emerged victorious in the auction for Belo Horizonte Tancredo Neves (Confins) with a winning bid of R$1.82 billion.

Key Highlights: 
  • The auction of the two rounds of airport concessions yielded a total of R$45.2 billion
  • Comprehensive master plans were completed for each of the five airports to form the basis of the value of the airport concessions
  • For both rounds of concessions, the entire projects were completed on a fast track with work beginning in June 2011 and the auction occurring in early February 2012 for Round 1 and with work beginning in February 2013 and the auction occurring in November 2013 for Round 2
Services Include: 
Demand Forecasting
Financial Advisory
Commercial Development
Master Planning
Economic Analysis
Due Diligence
Privatization
Regulatory and Rate Matters
Lenders Technical Advisory