The Islamic Development Bank (IDB), has approved a loan of US$230.2 million for the development of the second phase of the Sharm el-Sheikh airport.
In line with the bank’s model of Sharia-compliant financing, the IDB will levy a “service fee” rather than interest.
This new round of funding brings IDB contribution to the airport project up to US$457 million, or roughly LE3.26 billion, which exceeds the LE3 billion officials estimated the expansion would cost in 2013.
Tourism, once a pillar of Egypt’s economy, has declined dramatically since the 2011 revolution. Officials, however, are optimistic that the industry will bounce back now that President Abdel Fattah al Sisi is in power.
In recent months, a number of European countries have lifted travel warnings for Egypt’s Red Sea coast, including Germany and the United Kingdom.
Sharm el-Sheikh is Egypt’s second busiest airport after Cairo, and serves the Red Sea resort towns of Sharm el-Sheikh, Dahab and Nuweiba. According to the airport’s website, it serves around 10 million passengers per year.
A new terminal, with the somewhat confusing name of Terminal 1, was put into service in 2007, supplanting the decrepit Terminal 2.
The current expansion plans call for a third terminal building with an annual capacity of 10 million passengers. According to a project assessment by the African Development Bank, works include a new 3,600 meter runway, a multistory terminal building and a new parking area. The opening date for the new terminal was initially scheduled for 2012, but the Egyptian Airports Company has since revised the target opening date for late 2015.