WASHINGTON, DC, November 14, 2012 – In one of the most important recent infrastructure projects in Latin America, Sociedad Concesionaria Operadora Aeroportuaria Internacional S.A. – OPAIN S.A., has obtained $390 million in financing from three international development institutions to finance the development and construction costs for the expansion, operation and commercial development of the El Dorado International Airport in Bogotá, Colombia, with total estimated costs of the project of $1.2 billion. In a precedent-setting unified and multi-year transaction, the Inter-American Development Bank (IDB), China Development Bank (CDB)and Corporación Andina de Fomento (CAF), acting as senior lenders, joined to support the project as the single most important infrastructure project in Colombia. This represents the first time the three institutions have collaborated in a project financing.
Milbank’s Role
Two Milbank teams, in Washington, DC, and Beijing, represented the senior lenders on the transaction and supported global negotiations conducted in English, Spanish and Mandarin.Glenn S. Gerstell, the Washington, DC Milbank partner who led the firm’s deal team, noted, “Concession-based financings present their own set of challenges. The long-term concession issued by a Colombian government agency pursuant to public bidding procedures reflected the balance of the interests of the government, the airport users, and the successful bidder and its possible subsequent financiers. As a practical matter, the parties appreciate that it’s unlikely to be changed – so lenders and their lawyers have to craft solutions to make sure the financing meshes with the concession, while at the same time affording customary protections to the lenders to ensure repayment of their loans. The El Dorado Airport financing called on Milbank’s strengths in not only structuring these types of complicated concession-based financings in Latin America and indeed throughout the world, but also in coordinating financial institutions around the globe. Our attorneys in three offices conducted negotiations in English, Mandarin and Spanish. We started work on the project in 2009, and our familiarity with the clients and local counsel enabled us to work collaboratively to overcome the many challenges inherent in a project of this complexity.” Long active in Latin American financings, Mr. Gerstell is the managing partner of the firm’s Washington, DC, office and has served as the lead partner representing the IDB for several years.
With Milbank’s Washington, DC, office representing the IDB and CAF, the firm’s Beijing office, under a team led by partner Gary S. Wigmore, assisted CDB. The Milbank team representing the senior lenders included Washington senior associate Gavin W. McKeon, who has extensive experience with Latin American transactions and was listed by Chambers as an “associate to watch” for Latin America 2013 and in the Legal 500 for 2012; Beijing associates Shepard Liu and Li Wei; and Washington associates Alexis M. Sáinz (who is of Colombian descent) and Bijan Ganji.
Milbank acted as New York counsel to the senior lenders. The IDB’s internal legal counsel, Leif Weizman, represented the IDB, and CAF’s internal legal counsel, Octavio Rosselli, represented CAF. Cárdenas y Cárdenas served as counsel to the senior lenders as to Colombian law. Allen & Overy LLP acted as New York counsel to OPAIN in the transaction, and OPAIN was advised by Prieto y Carrizosa as to Colombian law.
The Airport Project
As the primary international gateway to Colombia, the El Dorado International Airport handles more airport cargo than any other airport in Latin America and is third largest in terms of passenger traffic. El Dorado’s main passenger terminal was constructed in 1959. In 2006, OPAIN S.A. was awarded a concession from the Colombian government’s Unidad Administrativa Especial Aeronáutica Civil (Aerocivil) to modernize the terminal and add new cargo facilities. The 20-year term concession requires OPAIN to provide most of El Dorado Airport’s services and gives OPAIN the right to collect all revenue from passenger departure fees, airport parking, use of boarding bridges, other air side regulated tariffs, and the commercial benefit of the cargo and passenger terminals. OPAIN began modernizing the airport in 2007 and needed to achieve this final financing in order to complete the modernization project of the airport.
About the Senior Lenders
Founded in 1959, the IDB has 48 member countries and is the leading source of development financing for Latin America and the Caribbean. CAF is a development bank established in 1970 that consists of eighteen countries in Latin America, the Caribbean and Europe, as well as fourteen private banks from the Andean region. Organized by the People’s Republic of China in 1994, CDB is the country’s leading international lender and is under the direct jurisdiction of the State Council.
About Milbank
Milbank, Tweed, Hadley & McCloy LLP is a leading international law firm providing innovative legal solutions to clients throughout the world for more than 140 years. Milbank is headquartered in New York and has offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, São Paulo, Singapore, Tokyo and Washington, DC.
The firm’s lawyers provide a full range of legal services to the world’s leading commercial, financial and industrial enterprises, as well as to institutions, individuals and governments. Milbank’s lawyers meet the needs of our clients by offering a highly integrated and collaborative range of services across key practice groups throughout our global network. Milbank’s integrated practice is underpinned by our attorneys’ acknowledged technical excellence, sectoral expertise and a strong tradition of innovation and client service.
