HAS Development Corporation: Building a modern new airport in Ecuador
Sector: Critical infrastructure
Challenge: A small, outdated airport in the middle of downtown Quito posed safety hazards and was not accessible to large aircraft, limiting travel, tourism and overall economic development in Quito and Ecuador. While the need for a larger, more modern airport was widely recognized, private lenders were unwilling to finance such a major project.
How OPIC helped: OPIC committed long-term financing, which helped developer HAS Development Corporation (an affiliate of the Houston Airport System) and its partners attract additional lenders into the deal so that there was sufficient financing to move the project forward.
Impact: The new Mariscal Sucre International Airport, opened in 2013, replacing what had been considered an operationally obsolete and relatively dangerous airport with one of Latin America’s most modern, which boasted the longest commercial runway in South America. The new airport was designed and built with world-class standards, including the prioritization of sustainable practices. Since opening, it has received 31 awards including Best Regional Airport in South America in 2017.
“Without OPIC, it is highly unlikely the project would have moved forward.”
With its rich biodiversity, a capitol city that is considered one of the world’s best preserved historic centers, the Galapagos Islands off the coast, the Andes and the Amazonian region, Ecuador is an increasingly popular destination for tourists from around the world. Fly into Ecuador’s capital today and you’ll land on a long runway on the outskirts of town, and enter a modern new facility that is efficient and incorporates sustainable practices from recycling to sourcing food locally.
Until recently, the experience was quite different.
In 2013, The Mariscal Sucre International Airport replaced a much older airport that had been built in the middle of the city with a short runway that made takeoff and landing in the high Andes very challenging, especially for larger aircraft, and made nonstop flights to Europe and North America impossible.
For years, Ecuador and transportation officials recognized the need for a new airport but they faced difficulty sourcing the financing for a project of this magnitude. “It was a complex project in a complex emerging market,” said Ramon Miro, President and CFO of HAS Development Corporation, which served as a key partner in the concession company, Quiport, which won the bid. When OPIC committed $200 million in long-term financing, other lenders including the Inter-American Development Bank, and Canada’s Economic Development Corporation joined in the project.
“Without OPIC it is highly unlikely the project would have moved forward. The catalytic bank that made all the difference was OPIC,” said Miro.
With financing secured, the focus turned to the myriad of other considerations involved in building a greenfield airport, among them: leveling a plateau in the Andes to build a 4,000 meter runway. Quiport and its affiliates oversaw land acquisitions, environmental and logistical concerns, and forged multiple relationships with businesses that would serve the growing number of tourists and business people to move through the airport – all while maintaining the old airport.
In the four years since the airport has opened it has brought multiple benefits:
- Five new passenger airlines have begun serving Quito, which now serves 27 domestic and international locations, providing valuable support for a growing tourism industry
- Five new cargo airlines have begun serving the airport, supporting local and international businesses. The longer runway has led to larger planes arriving and departing, offering Ecuador the opportunity to expand its export markets around the world
- Some 5,000 local workers were employed during the construction of the airport and the new airport employs about 7,500 full time staff. About 40 percent of the workforce is female
- Multiple small businesses have benefited, both by establishing retail stores in the new airport, and by participating in the airport’s Nuestra Huerta or Our Orchard program, which helps fledgling businesses acquire the resources and skills needed to expand and reach more customers
- Many American businesses have also reached new customers at the airport. U.S. businesses that have a presence in or around the airport include KFC of Lousiville, Kentucky; Cinnabon of Atlanta, Radisson of Minnetonka, Minnesota; Marriott of Bethesda, Maryland and Hertz of Esterro, Florida
The success of the project has been recognized in multiple awards, including Best Regional Airport in South America in 2017 by Skytrax World Awards, South America’s Leading Airport i2014, 2015, 2016 and 2017 by World Travel Awards, Latin American Transport Deal of the Year in 2006 by Project Finance Magazine, and Latin American Airport Finance Deal of the Year by Air Finance Journal.
This project was profiled in 2017