Korea Development Bank (KDB) has announced that it will lead a US$130 million equity investment from Korean entities in the Haikou Hainan Meilan International Airport expansion project.

KDB is expected to cooperate with China's Central Government, the Hainan Provincial Government, and the Asian Infrastructure Investment Bank on the US$2.8 billion project. KDB will set up a private equity fund to make the investment, it said. Other consortium members include Saemaul Bank and Kyowon Invest, a company set up in 2011 which specializes in alternative investments.

The cooperation between the KDB and AIIB is the latest sign that South Korea is willing to participate in Belt & Road projects. The AIIB is also committed to equity investments as well as loans, and in June signed its first equity deal for a fund investing in mid cap infrastructure companies in India.

The Indian government has been a major critic of the Belt Road initiative, and the involvement of the AIIB in such a deal illustrates that it is keen to shake off the perception of being a Belt & Road development bank.

Haikou Meilan International Airport lies 25 kilometres to the southeast of Haikou, the capital of Hainan Province. The airport opened in May 1999, and has routes to over eighty destinations. But most of these are domestic, and there is a need to expand the airport to accommodate more international flights.

It is the home base of Hainan Airlines, part of HNA Group, which is the majority shareholder in the airport. The airport expansion will be completed in October 2019. The new terminal will have a floor area of 296,000 square metres and will have a new four-story terminal building and one runway. The airport expansion is being designed by ADP Ingenierie, a subsidiary of Aeroports de Paris Group.

Photo: mlairport.com