Turkey's Dalaman Airport will receive a €175m loan from the European Bank for Reconstruction and Development (EBRD) for the construction and operation of a new domestic terminal.
The bank will lend the amount to Havalimani Yapim ve Isletme, a special-purpose vehicle set up by the Turkish construction and infrastructure company YDA Insaat after a concession contract was awarded last year.
YDA Insaat won the tender for the operating rights of the airport last year with a bid of €705m. It will operate both the international and the new domestic terminal until the end of 2040.
YDA Group has been managing the Dalaman International Airport since 2006.
The airport will use the fund to construct an energy-efficient and environmentally friendly domestic terminal with road access and parking facilities.
The bank loan comprises a 16-year A-loan of €87.5m for the bank's own account and a 15-year B-loan €87.5m syndicated to UniCredit Bank Austria.
EBRD director for transport Sue Barrett said: "Dalaman is the first regional airport that the EBRD is financing and we expect other regional airports to be operating under successful PPP schemes in future."
The new terminal will be able to boost the airport's annual domestic passenger capacity from the current three million to ten million passengers.
Reuters reported that Turkey has become EBRD's largest recipient in 2014 as the investments in the country increased to €1.4bn from €920m.
Chairman of YDA Group Hüseyin Arslan said: "We are making a huge investment worth €1bn and will transform the airport and the travel experience of passengers."
Image: An aerial view of Turkey's Dalaman Airport. Photo: courtesy of European Bank for Reconstruction and Development.