Airport Concessions Lima / Peru an Example for Brazil? PPP Americas, 12 May 2010 Felix von Berg, Fraport AG

Content Page 2 Lima airport concession and the Peruvian model for airport concessions Implications for Brazil PPP Americas May 2010, Fraport Presentation

Content Page 3 Lima airport concession and the Peru- vian model for airport concessions Implications for Brazil PPP Americas May 2010, Fraport Presentation

Fraport – managing 13 Airports worldwide under various legal forms Lima FRANKFURT Hong Kong Shanghai Amsterdam Antalya Hahn DelhiOrlando Senegal* Xian Kairo* Athen Wien Hannover Varna Burgas Lima FRANKFURT Antalya Delhi Dakar Xian Hanover Varna & Burgas Cairo Riyadh Jeddah Ownership of airport Concessions Management Contract Fraport St Peters- burg Majority Minority Fraport PAX 2009 (m) Frankfurt50.9 Delhi25.3 Antalya18.7 Jeddah15.3 Cairo14.4 Riyadh10.8 Xian15.3 Lima8.8 St. Petersburg6.8 Hannover5.0 Burgas1.7 Dakar1.8 Varna1.2 Total176.0 Lima PPP Americas May 2010, Fraport Presentation

page 5 Jorge Chavez International Airport (JCIA) Key Facts Jorge Chavez Int, Airport Runway: 3,507,5 m 84,570 m² passenger terminals 304,881 m² of apron 63 commercial shops run by 34 different companies 19 passenger loading bridges Traffic ,786m passengers 232,374 tons of cargo 104,965 air traffic movements Non-stop destinations National: 16 International: 29

page 6 Typlical build, operate and transfer concession with full air & landside opera- tion of airport (w/o air traffic control) by concessionaire (Lima Airport Partners) Concession start 2001, duration 30 years + 10 year extention option Take-over of existing staff, but not of bureaucratic structures – quasi start-up Investments during concession > US$ 1bn Up-to-date > US$ 266m Mainly rigid requirements for expansion - not demand based investment criteria Service Level IATA B as main quality parameter Concession outline PPP Americas May 2010, Fraport Presentation

page 7 Concession fee: %-age of revenues CPI – X tariff regulation Tax stability agreement for investors Solid bankability with usual assignments possible, step-in rights for banks and certain guarantees for debt providers by Peruvian state Initial financing by OPIC and German KfW 2007: Refinancing of LAP with bond issue achieved IG-rating before Peru did Won Euromoneys and International Financial Law Reviews Deal of the year Latin America / Americas Risk Mitigation / Sharing PPP Americas May 2010, Fraport Presentation

page 8 Successful concession (I/III) ***2000*** m 50 m 75 m CAPEX (US$) Investments Before concession minimal investments After concession focussed investments to increase capacity, quality and retail revenues average yearly invest: ~ US$ 6 Mio average yearly invest: ~ US$ 30m PAX CAGR: 3% CAGR: 10% 5 m 10 m PAX development Before concession PAX CAGR (3%) = Ø-GDP growth (2,5%) After concession: PAX CAGR 10% versus 5% Ø-GDP growth Concession 2009 tariffs* in real terms below ** ***2000*** Contribution to the public sector** (US$) * Weighted average ** Calculated before privatization as pro forma EBITDA,/, Capex, after privatization as total concession fees to public sector + taxes, ***No pro forma data availabe, 25 m 50 m 75 m 100 m Net effect for public sector contribution in year 1 already ~ 1,5 x EBITDA and ~ 2 x EBITDA,/, Capex of best year prior to privatization average contribution p,a,: ~ US$ 11 Mio average contribution p,a,: ~ US$ 65 Mio 2009 PPP Americas May 2010, Fraport Presentation

From taking over the airport in Successful concession (II/III) LAP concession May 2009 page 9 substation retail area apron

page to one of the best airports in the region Successful concession (III/III) Skytrax World Airport Awards TM 1. Place – Airport of the year South America 2. Place – Airport of the year South America 1. Place – Airport of the year South America World Travel Awards Winner Leading Airport South America PPP Americas May 2010, Fraport Presentation

page 11 Funding of Peruvian Airport Sector Lima airport concession fee payments Dedicated Fund Nothern Peru Regionals Southern Peru Regionals (tender ongoing) Not profitable airports Awarded on basis of least subsidy for operations Capex funded by state PPP Americas May 2010, Fraport Presentation $ $ $

Content Page 12 Lima airport concession and the Peruvian model for airport concessions Implications for Brazil PPP Americas May 2010, Fraport Presentation

page 13 Draft Concession Program for Brazilian Airport Sector self-sustaining airports (17)* Remaining 50 airports Concession program with [25] years terms, tendered individually or in groups. Concessionaires responsibilities Operation and maintenance with international efficiency and quality standards Investment obligation to meet growing demand Concession fee to be paid to the government Stay with the Infraero / public administration. Funding from Own operating cash-flow Concession fee payments from 17 airports Infraero operating 67 airports with 97% Brazilian commercial traffic * Of the 67 Infraero airport all 18 with PAX > 1m (exlcuding Natal airport) were studied. All but Cuibá airport were identified as economically viable under above mentioned concession regime PPP Americas May 2010, Fraport Presentation

Ball-park calculation for 17 airports under concession regime (conservative case, in real terns) page 14 PPP Americas May 2010, Fraport Presentation Year

page 15 Funding of 67 airports: ball-park comparison - public sector view (conservative case, in real terns) Infraero / public sector funding with concessions Funding of investments (actual) Year one total concession fees > Infraero 2008 operating cash-flow without investments Infraero able to generate Ø cash- flow for invest- ments ~ R$ 0,4bn Estimated requir. Ø investment ~ 1,4bn Concession program can cover the gap Note: 1) ATC and treasury will remain with existing shares of tariffs (67 airports) PPP Americas May 2010, Fraport Presentation

Thank you for your attention! page 16 Fraport, The Airport Manager Frankfurt AirportBurgas AirportVarna Airport Cairo International Airport Aéroport International Blaise Diagne, Dakar Xi´an Xianyang International AirportKing Abdulaziz Internation Airport, Jiddah Flughafen Hannover-Langenhagen Antalya AirportIndira Gandhi International Airport, Delhi Jorge Chávez International Airport, Lima King Khalid International Airport, Riyadh Pulkovo International Airport, St, Peterburg 176 Million Passengers, 13 Airports, 1 Airport Manager PPP Americas May 2010, Fraport Presentation

Page 17 Annex PPP Americas May 2010, Fraport Presentation

page 18 Main assumptions and model considerations of outlined concession model description Award criteria Award on basis of highest proposed concession fee payment (percentage) [Consideration of technical proposal &quality of business plan (pass/fail criterion or as additional award criterion) suggested] Demand Based on traffic growth and IAC data as well as AGC (/Fraport) analysis based on current air traffic distribution, trends and capacity constraints Tariffs Current tariff-regime kept in concession model. Concessionaire gets current Infraero tariff share (Parcela Infraero and Ataero Infraero). ATC (Ataero Aeronáutica) and treasury (Parcela Tesouro) retain their share Opex Infraeros productivity and efficiency parameters were analyzed and adjusted in accordance with international benchmarks [not very aggressively] Investments Based on current capacity and demand forecast, investments were modeled to meet IATA service level C [much higher quality standard than currently in place] Concession term 25 years [could be adjusted on a case-by-case basis in order to make some concessions more attractive and stimulate stronger tender competition ] PPP Americas May 2010, Fraport Presentation