DILI, 15 december 2022 ( TATOLI)-Australia and Timor-Leste sign a financial agreement worth $73.36 million to redevelop the President Nicolau Lobato International Airport.
Today’s signing of a loan agreement worth $45 million, and a grant agreement worth $28.36 million from the Australian Government through the Australian Infrastructure Financing Facilities for the Pacific (AIFFP),
The agreement was signed by Timor-Leste Finance Minister, Rui Agosto Gomes and the First Assistant Secretary, Southeast Asia Maritime Division, Office of Southeast Asia, Department of Foreign Affairs and Trade, Ridwaan Jadwat.
Speaking at the signing ceremony, First Assistant Secretary, Southeast Asia Maritime Division, Office of Southeast Asia, Department of Foreign Affairs and Trade, Ridwaan Jadwat said the Australian Government is committed to strengthening its relationship with Timor-Leste by delivering the redevelopment package to underscores Australia’s commitment to supporting Timor-Leste’s economic recovery, diversification, and resilience.
“Timor-Leste’s economic resilience is a priority for the government and this country, therefore investment in all forms is needed to secure a stable future for the people of this country. As the country’s main international gateway, the airport is key to driving further economic opportunities for Timor-Leste. Australia joins the Asian Development Bank (ADB) International Finance Corporation and Japan International Cooperation Agency (JICA) as partners with Timor-Leste on the redevelopment project,” said Ridwaan Jadwat.
Australia’s contribution will deliver critical infrastructure components including improving road access to the airport terminal, lighting, and new rescue firefighting and healthcare facilities. Australia’s investment has been designed to improve the lives of the Timorese people and maximize local jobs, especially for women.
“The concessional financing package is Australia’s first sovereign loan to Timor-Leste and a milestone in the relationship between our countries. The $97.7 million package includes a $57.1 million AIFFP loan and up to $40.6 million in grants” he said.
He also said that as a major lender in the region, Australia is delivering infrastructure projects that are sustainable, meet international standards, and do not impose unsustainable debt burdens.
He also confirmed that the Australian Government has also financed and supported project preparation through its partnerships for the Infrastructure program.
Minister of Finance, Rui Gomes said it is a high-impact grant/loan project that will directly touch and change many lives of this small island state and build their capacities to be able to reach the long-term dream of becoming a modern and prosperous country.
“I am confident that the renovation of this strategic project will be implemented in a timely manner and will stand as a worthy symbol of the Timor-Leste-Australia partnership. So Important,”
In his speech, Gomes emphasized that the development of the airport follows a hybrid type of PPP, given the nature of the financing mechanism that involves multiple funding sources, such as loans, grants, and the State Budget for the development of the various facilities of the airport.
The complex nature of this funding mechanism calls for better coordination amongst donors to avoid waste of resources and duplication of work.
The option for the PPP modality is to sustain the longevity of the Petroleum Fund, whose petroleum revenues have now ceased.
There is a number of PPP projects, including in the area of health diagnostics, affordable housing, renewable energy, the Port of Tibar that was recently inaugurated, and tourism-related projects.
For the first phase of the project: “we have secured a $135 million loan from the Asian Development Bank to upgrade the runway, taxiways, the apron, the traffic control tower, and the aeronautical lighting system. In January next year, we will secure an approximately $40 million grant from JICA to build the new Airport Terminal,”
“We have also secured $17.5 million in the State’s budget to co-finance some activities, including compensation to those families affected by the project, consultancy services, demolition works, etc.,” Gomes explained.
While for today’s signing load, Gomes said will improve facilities at the President Nicolau Lobato International Airport to serve both current and larger aircraft operations and will have the capacity to support broader sectoral development initiatives including tourism, agriculture, and health management at border entry points. In particular, the project will support improved airport safety and security compliance; operational enhancements; and support Timor-Leste’s objectives for economic growth, job creation, raising incomes, and knowledge transfer, through the provision of cargo handling and quarantine facilities.
“Hopefully this project will implement soon to create more local jobs and will connect the International route flight to attract more tourists to visit Timor – Leste to diversity the growth of the economy in the upcoming future,” he concluded.
Journalist: Camilio de Sousa
Editor: Nelia B.
