TIRANA, April 25 – China Everbright has announced it has officially reached a deal to take over Albania’s sole international airport for an undisclosed amount, which along with the new acquisition of the country’s biggest oil producer is expected to make China one of the country’s top foreign investors. In a statement issued this week, the Chinese state-owned investment company said that Keen Dynamics Limited, its joint venture with Hong Kong-based Friedmann Pacific Asset Management Limited focusing on global airport investments, has signed a deal to take over the Tirana International Airport (TIA) concessionaire until 2027. The TIA concessionaire which had earlier admitted takeover negotiations, has not officially confirmed the deal yet.
Chen Shuang, the CEO of China Everbright Limited (CEL) said “CEL is in the process of establishing its China Everbright Overseas Infrastructure Fund which eyes on global infrastructure opportunities, and the acquisition of the Tirana International Airport signs the first move.”
Local media had earlier reported the companies were negotiating over a $90 million deal. Since 2005, the TIA consortium has invested more than €70 million in the airport’s reconstruction and expansion including a new terminal. The consortium employs some 275 people.
While the terms of the deal have not been disclosed yet, a spokesman for China Everbright told Reuters China Everbright will hold the majority 75 percent in the new consortium with Friedman Pacific.
China Everbright and Friedmann Pacific possess long-term business partnership since their collaboration in the investment of China Aircraft Leasing Group Holdings Limited.
“The joint investment this time brings together the financial resources and networks from CEL, together with the expertise in sourcing overseas airports from Friedmann Pacific, which results in a great synergy. Also, we believe that acquisition of the quality asset will create stable cash flow and good investment return to the company and its shareholders,” said Chen Shuang.
The TIA acquisition is also part of the corporate strategy to identify good infrastructure investment opportunities, which is in line with China’s Belt and Road Initiative.
China Everbright described the Tirana International Airport as Albania’s most important transport hub and one of the fastest growing airports in Europe. “The number of passengers increased from 600,000 in 2005 to 2 million in 2015. The airport in itself is testimony to Albania’s rapid economic development,” said the company, part of state-owned conglomerate China Everbright Group.
In late 2015, China Everbright announced plans to invest in airport and infrastructure assets in Europe as part of Beijing’s ambitious “One Belt One Road” initiative, a plan to wrap its own infrastructure and influence westward by land and by sea.
The deal comes at a time when the exclusive rights that the country’s sole international airport has been holding on international flights for a decade have finally been lifted, paving the way for the operation of new airports that would increase competition and reduce current ticket prices, estimated among the region’s highest. The April 2016 deal is expected to activate the new United Arab Emirates-funded Kukesairport in north-eastern Albania and the construction of two new airports in southern Albania serving the tourism industry.
The newly expected operation of the Kukes airport near the Kosovo border will extend TIA’s concession contract until April 2027.
The long-awaited agreement came after two years of intensive negotiations with the Tirana International Airport concessionaire, which will benefit a 2-year extension of its original 20-year build-operate-transfer concession contract for the opening of the new Kukes airport and half a year for each of the expected new Vlora and Saranda airports.
The consortium’s shareholders include AviAlliance GmbH, a subsidiary of Canada-based PSP Investments with 47 percent, Germany’s DEG with 31.7 percent and the Albanian-American Enterprise Fund with a 21.3 percent stake.
Earlier in March, Canada-based Bankers Petroleum signed a preliminary deal with China’s Geo-Jade Petroleum Corporation to sell its major Albania assets and a newly acquired minor oil block in Hungary for a reported C$575 million (€392 mln). The surprise announcement came as the country’s biggest oil producer has recently been facing tough times after more than a decade of operations in Albania due to a sharp cut in international oil prices and tax and environmental disputes with the Albanian government.
The new deals are on track to increase China’s presence as a foreign investor in Albania from almost zero to almost half a billion euros making China among the country’s top foreign investors at a time when the economic superpower is already emerging as the country’s second largest trading partner.
