In December 2022, the Australian Infrastructure Financing Facility for the Pacific (AIFFP) announced that Australia is partnering with the Democratic Republic of Timor-Leste with a $97.7 million concessional financing package for the redevelopment of the Presidente Nicolau Lobato International Airport in Dili. This is Australia’s first sovereign loan to Timor-Leste.
The financing package includes a $57.1 million loan and $32.7 million grant through the AIFFP and a grant of up to $7.9 million through the Department of Foreign Affairs and Trade’s bilateral program.
Australia’s contribution also includes funding from the Australian Government’s Partnerships for Infrastructure program for project preparation activities. Australia’s investment will complement additional work being undertaken at the airport including a new runway supported by the Asian Development Bank and a new terminal supported by the Japan International Cooperation Agency.
Australia’s investment will contribute to the delivery of 13 critical infrastructure components. These include improving trade capability through a new cargo terminal building as well as an animal and plant quarantine facility. There will be improved access to the airport terminal through the upgrade of surrounding access roads and footpaths as well as renewal of the terminal carpark and drop-off zones.
The health and safety of travellers and airport staff will be enhanced through the construction of an airport rescue and firefighting building, a primary healthcare facility, and enhanced perimeter security fencing.
Surrounding services will be improved via a new bridge over the Comoro River and a new elementary school at Beto Tasi. Finally, the project will support the operations and maintenance of the airport through a new airport maintenance facility, upgrading the fuel depot, new street lighting, water, sewer and electricity services.
AUD97.7 million total package, including AUD89.8 million through the AIFFP.
|Variable interest rate||Tenor|
|Loan||$57.1||$40.0||SOFR + 1.23%||25 years|
Exchange rate of AUD/USD = 0.70, exact AUD amount depends on exchange rate at disbursement. SOFR is the Secured Overnight Financing Rate.
Asian Development Bank
International Finance Corporation
Japan International Cooperation Agency
Partnerships for Infrastructure
Democratic Republic of Timor-Leste
Australia’s partnership with Timor-Leste for the redevelopment of the Presidente Nicolau Lobato International Airport will help to achieve a key development priority for Timor-Leste.
Presidente Nicolau Lobato International Airport is Timor-Leste’s main international gateway and is key to driving further economic opportunities for Timor-Leste. The redevelopment will support increased economic growth, connectivity with the region, create local jobs, and achieve a key development priority for Timor-Leste.
Australia’s investment has been designed to improve the lives of the Timorese people and create local jobs, especially for women. A local content plan will be formulated to maximise the opportunities for local workers and businesses as part of the redevelopment, including opportunities for women.
The concessional financing package is Australia’s first sovereign financing loan to Timor-Leste, and is blended with grants to ensure Australian support for the airport redevelopment is concessional and does not impose an unsustainable debt burden.
Beyond the project delivery phase, the investment will facilitate increased tourism flows by expanding passenger capacity and experience, as well as through compliance with critical international safety and security standards. In turn, opportunities for local employment and economic growth will be created in the local tourism industry.
Similarly, the redevelopment will deliver new facilities to improve capability for cargo and quarantine management, which will provide long-term growth opportunities for Timor-Leste’s important agricultural sector, particularly the live fisheries industry.
With more Australians than any other nationality travel to Timor-Leste by air, the investment will also deepen the close relationship between the people of Australia and Timor-Leste.
Utilising a combination of concessional loans and grants, Australia’s financing package is sustainable, will create local jobs, and support Timor-Leste’s economic recovery and long-term growth.