Turkish airport operator TAV Airports has decided to participate in additional investments that would increase the capacity of Madinah Airport to ensure it can handle 18 million passengers annually in the future, it announced Thursday.
"Our board of directors has decided to participate in additional investments that will increase the capacity of Madinah Airport, operated by our joint venture company TIBAH Development, in which we have a 26% stake, from 8 million annual passengers to 18 million passengers, to be carried out in two stages," it was stated in the statement made to the Public Disclosure Platform (KAP).
Accordingly, a new domestic terminal will be built, and the existing terminal will be developed to accommodate 18 million passengers annually.
The expected total amount of investments to be made in two stages for the entire joint venture is $275 million. The amount corresponding to TAV Airports' 26% stake in the joint venture will be $71.5 million.
TAV plans for the investment program to start in the first half of 2024 and to be completed in 2027.
TAV Airports CEO Serkan Kaptan said, "We have been successfully operating Madinah Airport, the gateway to the Holy Land, together with our partner Al-Rajhi, for the last 12 years."
"The passenger traffic is increasing at a very fast pace following the lift of travel bans brought in during the pandemic. This new investment program will help accommodate increasing demand and is fully supporting Saudi Arabia’s Vision 2030, which aims to attract more visitors to the country."
The investment is expected to be financed with 70% debt and 30% equity, according to the statement provided at KAP. The planned investment includes building a new domestic terminal with an area of 40,000 square meters (430,556 square feet) and developing the existing terminal further for international traffic.
The gateway, also called Prince Mohammad Bin Abdulaziz International Airport, served 9.4 million passengers last year as restrictions imposed during COVID-19 were lifted.
The airport's passenger traffic increased by 49% compared to the previous year and by 12% when compared to the period before the pandemic.
TAV Airports began the operation and development of Madinah Airport in 2012, the first airport privatization project in Saudi Arabia, together with its consortium partners.
Beginning to operate Madinah Airport on June 30th, 2012, the consortium put the passenger terminal, which was renovated by an investment of approximately $1.2 billion, into operation in April 2015, according to TAV Airports.
The new terminal building became the first Leadership Energy Environmental Design (LEED) certificated building in the Middle East and North Africa (MENA) region. The consortium of TAV Airports and Al-Rajhi Holding holds the concession rights to operate Madinah Airport until May 2041.