AIMM Sector Framework Brief
Sector Economics and Development Impact Department
International Finance Corporation

AIRPORTS
September 2019

Development Impact Thesis – By connecting people and businesses to different markets, airports help facilitate a wide range of
economic activity in the local and global economy: from enabling business interaction to stimulating foreign investment andencouraging trade and tourism. By facilitating tourism and trade, airports generate economic growth, provide jobs, and increase
revenues from taxes. IFC’s engagement in the airport sector help beneficiary countries:→ Increase access to more reliable airport services→ Increase fiscal revenues and other transfers→ Generate concomitant direct, indirect, andinduced effects on GDP and employment

→ Increase number of market participants, productofferings, and efficiency of airport services→ Improve sector resilience and quality of supply→ Improve spatial connectivity and integration into
the global economy→ Adopt sector-wide sustainable ESG practicesProject
Outcomes

Contributions toMarket Creation

Development Gaps Addressed••••

Inadequate airport services
Unreliable airport services
Fiscal deficits
Economic growth and job
creation

Rating Construct – All AIMM sector frameworks include detailed guidance notes that help define project outcomes and contributions
to market creation, aggregating to an overall assessment of development impact.
•

For project outcomes, stakeholder effects are the key components for which industry-specific benchmarks define the context
in which an IFC operation seeks to drive changes. This gap analysis is combined with a separate set of impact intensity
estimates that specify the expected results using predefined indicators.

•

For contributions to market creation, industry-specific market typologies define stages of development for four market
attributes (or objectives): competitiveness, resilience, integration, and sustainability. These market typologies, whencombined with estimates of how much an intervention affects the development of a market attribute, provide thefoundation for IFC’s assessment of an intervention’s market-level potential for delivering systemic changes.
PROJECT OUTCOME INDICATORS
Access (customers)• Air traffic movement (ATM), #• Number of passengers, #• Volume of Cargo, tons

Stakeholders

CONTRIBUTION TO MARKET CREATION INDICATORS

Competitiveness• Entry of new players into the sector through a full/partial privatization• Acquisition and/or transfer of management of airport to the private sector• Introduce new technology that improves the efficiency/safety• Introduce new industry standards in operations/management and/or enforcement• Improve cost efficiency by successful restructuring and/or planning capacity• Support implementation of new tariff structures contributing to financial
sustainability and competitivenessResilience• Diversify the country’s access options to domestic and international routes• Develop new infrastructure development/upgrade that improve resilience toadverse weather conditions/natural disasters• Develop new infrastructure / systems that improve airport security• Improve cost recovery and/or financial sustainability of the airport.
• Strengthen the legal/institutional framework & support implementation of reforms• Capacity building for regulatory entity with impact on KPIs

Integration• Support spatial integration by expanding access• Construction of new airport infrastructure linking a remote area to economic center• Development of shared infrastructure• Development of local supply chain and local downstream industries• Support innovative financing products with replication potential by other companies

Sustainability• Adoption of new replicable climate mitigation/adaptation technology/process• Demonstration of low water-intensity technology reducing industry water use• Adoption of international best practice ESIG standards with potential demonstration• Complementary advisory component aimed at improving ESG regulatory
framework, strengthening institutions for enforcement, or other

Quality• Passenger processing time, Seconds• Space per Passenger, Sqm• Waiting time, Minutes• Turnaround time per aircraft type, Minutes• Improved airfield infrastructures (runway, apron and taxiway), Change in category
Fiscal Effects• Government transfers, (taxes, concession and other fees, dividends etc.), $

•
•
•
•

Value added, $Indirect and induced employment, #Direct employment – Operation and Maintenance, #Direct employment –Construction, #Economy-wide

IFC’s Environmental and Social Performance Standards define IFC clients’ responsibilities for managing their environmental and social
risks. While for most IFC investments meeting Performance Standards reflects improved environmental and social performance,effects from implementation of the standards are only claimed in the AIMM framework where a clear counterfactual can beestablished and where the investment intent is to improve environmental or social outcomes.
Sector Specific Principles or Issues – The following principles will be applied for projects rated under this framework:
Principle or
Issue

Treatment Under Framework

Score of assessment

Both project and market creation effects are measured annually over the monitoring period of the investment. These effects
typically outlive the project's monitoring period. Effects that can be measured and monitored during the project's monitoring
period are emphasized.

Benchmarking andNormalization

Impact assessments are based primarily on the size of the deficit being addressed. This methodology gives greater weight toprojects addressing large deficits and those creating missing markets. A secondary consideration is normalization to avoid
disadvantaging small projects. In airport sector projects, all access indicators are scaled by the volume of invested capital. Some ofthe quality outcomes are benchmarked in terms of percentage improvement. Other quality indicators such as improved airfield
infrastructures (apron, taxiway and runway) are benchmarked in terms of category upgrade and compliance with IATA/ICAO
regulatory requirement.

Treatment of negative
effects

A project’s negative externalities are mentioned in the AIMM assessment only when significant enough to mitigate the overallrating. Airport sector projects could generate negative impact at project level in the following areas: (i) an increase in the airport
tariff much higher than the comparative level and/or industry benchmarks, and (ii) significant environmental and social impacts
including noise pollution and large-scale relocation. Fiscal liabilities are captured in fiscal effects of the project, therefore have a
direct bearing on the size of this impact and the rating. Quantifiable negative environmental effects, e.g. GHG emissions, can also be
included in the project’s ERR calculations, if data available. At market level, a project could reduce competition when solidifying themonopoly position of a client operating in a contestable market. In addition, pervasive local content requirements that are deemed
to have potential negative anti-competitive effects will be taken into consideration. The proposed rating methodology mitigates
overall market impact ratings if these effects represent significant risks. A running list of key mitigating factors will be maintained by
CSEDR to guide the rating process.

Qualitative Benchmarks forMarket Gaps

The analysis of the current context in which a project is taking place can be either quantitative or qualitatively. Quantitative
benchmarks are used where possible in conjunction with a check list of market features that define market stages. In other cases
where comparison across markets on a purely quantitative basis is not meaningful a qualitative assessment is used instead. For
these variables, qualitative benchmarks informed from comparison to top performers in the emerging markets groups among otherqualitative considerations.

Project Outcomes – The AIMM system considers the extent of the development gap and uses a gap analysis to classify project contexts
according to the size of the deficit/gap being addressed. For each indicator, the size of the gap is measured in relation to development
goals associated with the sector. Contexts are classified into very large, large, medium or low gap, for each performance dimension.
Development gaps are defined using a combination of qualitative and quantitative benchmarks, which leaves room to consider
context-specific attributes that drive investments in the sector. For this framework, access refers to the provision of reliable airport
transport facilities that helps to expand the air transportation networks, rehabilitate and build airport facilities. This is measured as thenumber of air traffic movement (ATM), number of passengers, and volume of cargo. Quality refers to the extent the airport transport
services have become more efficient, effective, and sustainable. The key measurement metrics for quality includes the passenger
processing time, space per passenger, waiting time, , turnaround time per aircraft type, improved airfield infrastructures (runway,
apron and taxiway), and change in category. In addition to boosting revenue from taxes, the improvements in access and reliability is
expected to generate higher consumer welfare and boost productivity depending on the depth of linkages with the local economy,
through indirect and induce effects on employment and growth. The stakeholder effects on government is measures throughgovernment transfers, (taxes, concession and other fees, dividends etc.) whereas the economy-wide indicators include the value
added and the creation of the direct and indirect employment.
COUNTRYCONTEXT

Access (Customers)

Low Gap

Medium Gap− Number of passengers− Number of passengers
carried is higher than upper
carried falls below
middle-income average;
comparable developing
indicative benchmark:markets; indicative>1,178,039 (WDI 2017 upper
benchmark: between
middle-income average]
420,388-1,178,039 [WDI2017 lower middle income
and upper middle-income
average]2

Large Gap

Very Large Gap− Number of passengers
carried falls below
comparable developing
markets; indicative
benchmark: between
17,659- 420,388 [WDI 2017
low income and lower
middle-income average]− Number of passengers
carried falls well below
comparable developing
markets; indicative
benchmark: < 17,659 [Lowincome average- WDI 2017]

COUNTRYCONTEXT

Quality (Customers)

Fiscal effects

Economy-wide

Low Gap

Medium Gap

Large Gap

Very Large Gap− Passenger processing− Passenger processingtime/space: Optimal/overtime/space: Subdesign terminal facilities that
optimal/Optimal terminal
provide sufficient space tofacilities that provide
accommodate all necessary
somewhat insufficient spacefunctions comfortably;to accommodate allprovide stable passenger
necessary functions
flows with acceptablecomfortably; stablewaiting times; denote anpassenger flows withoverall good service
acceptable waiting times;(comfort level) to
denote some degree ofpassengers; balanceservice (comfort level) to
economic terminal
passengers; somewhat
dimensions with passenger
balance economic terminal
expectations
dimensions with passenger
expectations− Airfield infrastructures:
Runway has the most
− Airfield infrastructures:
advanced level category
Runway has a mid-level(category III C) instrument
category (category III A andlanding system (“ILS”).
BI) instrument landing
Runway’s condition issystem (“ILS”). Runway’s
excellentcondition is good

− Passenger processing− Passenger processingtime/space: Sub-optimal
time/space: Under-provided
terminal facilities thatterminal facilities with very
provide insufficient space toinsufficient space toaccommodate all necessary
accommodate all necessaryfunctions in a comfortably;
functions comfortably;
unstable passenger flows
unstable passenger flows
with long waiting times;
with long waiting times;
lacks standard degree oflacks standard degree ofservice (comfort level); andservice (comfort level); andbalance economic terminalbalance economic terminal
dimensions with passenger
dimensions with passenger
expectations; inadequate
expectations; terminal
terminal space tofacilities require
accommodate passenger
reconfiguration to reach
expectations
optimum standard− Airfield infrastructures:− Airfield infrastructures:
Runway has a low-level
Runway has a low-level
category (category II)
category (category I)
instrument landing system
instrument landing system(“ILS”). Runway’s condition is(“ILS”). Runway’s condition is
poor
poor

− Government current budget– current account balance asa percentage of GDP− Overall debt to GDP ratio Central government debt as
a percentage of G
− Tax revenues as a share of
GDP - country's level of tax
revenues as a percent ofGDP− IMF FM identifies a positive
trajectory on debt
sustainability− Government current budget– current account balance asa percentage of GDP− Overall debt to GDP ratio Central government debt as
a percentage of GDP− Tax revenues as a share of
GDP - country's level of tax
revenues as a percent ofGDP− IMF FM identifies a neutral
trajectory on debt
sustainability− Government current budget– current account balance asa percentage of GDP− Overall debt to GDP ratio Central government debt as
a percentage of GDP− Tax revenues as a share of
GDP - country's level of tax
revenues as a percent ofGDP− IMF FM identifies a negative
trajectory on debt
sustainability− Country is in the low-incomegroup− Country has very low labormarket participation rates,
including of its skilled labor
force. Technical skills for theenergy sector are typicallyimported− Share of informal
employment is high− Country is in the lower
middle-income group− Country has a low level oflabor market participation,
including of its skilled labor
force. Technical skills for theenergy sector are typicallyimported− Share of informal
employment is high− Country is in the upper− Country is in the highmiddle-income group
income group.
− Country has above average− Country has a high level oflabor market participation,
labor market participation
with skills for the sector but
and a high absorption ratesome gaps exist. Evidence offor its skilled labor force
development-oriented− Share of informal
policies improving
employment is low
productive employment− Share of informal
employment is average− Government current budget– current account balance asa percentage of GDP− Overall debt to GDP ratio Central government debt as
a percentage of GDP− Tax revenues as a share of
GDP - country's level of tax
revenues as a percent ofGDP− IMF FM identifies a negative
trajectory on debt
sustainability“Core outcomes” for airport sector investments include impacts on customers, government and economy-wide impacts (value-addedand employment). The rating will be driven mainly by impact on customers, payment to the government, value added andemployment. Value-added and employment effects reflect the extent of linkages between the airport operation and the local
economy, typically achieved through backward and forward linkages. A project need not deliver impact in all potential core impact
dimensions but should do so in the intended area of focus. Although environmental impacts are considered “non-core” in airport
projects, this framework will evaluate and rate any negative significant environmental impacts by the project. The core outcomes inregard to impact on customers include: (1) an increase in access of the airport service, and (2) an improvement in the quality of the
airport service.

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PROJECTINTENSITY

Below Average

Average− Yields positive access effects − Yields positive access effects
Access

Qualitythat are small relative to thesize of the investment; thisrating is issued for projects
where access is a secondary
objectivethat are average relative tothe size of the investment− The project is not expected
to generate measurable
impact in this component− Project leads an average
improvement inquality/reliability of services

Above Average

Significantly Above
Average− Leads to substantial increase − Leads to a significant
in number of passengers, theincrease in number ofcapacity increase ispassengers, the capacity
associated with a significant
increase is associated withand quantified improvement
significant quantified accessin access; impact is delivered
improvements; impact isefficiently
delivered efficiently− Project leads to above
average improvement inquality/reliability of services− Project leads to significantly
above average
improvements inquality/reliability of services

The AIMM methodology considers the uncertainty around the realization of the potential development impact being claimed, making
a distinction between the potential outcomes that a project could deliver and what could be realistically achievable in the project’s
development context. The table below presents the key types of risk factors for microfinance and digital financial service operations.
PROJECT
LIKELIHOOD

Operational Factors

Sector Factors

Assessment
Considerations• Client track record of delivering impact in the focus area
• Client’s market position and product offering• Sponsor’s technical strength and support to project• Covenants assuring implementation of specific components• Project likelihood of reaching financial close at targeted levelof capitalization (mostly relevant to Funds)• Presence of funded plan developing complementary
infrastructure• Public partner track record in meeting contractual obligations• Realism of magnitude of anticipated impact• Negative factors affecting the project company, sponsor or
the management team which detracts from likelihood• Funding and sequencing of technical assistance to address
specific execution risks• Definition and realism of development impact targets• Extent of political support and social buy-in• Financial viability in the absence of subsidies• Resilience to exogenous shocks• Exposure of project development effects to exogenous shocks
e.g. foreign exchange risk FX risk

Contribution to Market Creation – For the market impact assessment, a market is defined as the industry/sub-sector in which the
project is taking place (excluding markets affected by the project through economic linkages). In airports, “market” refers to the airtransportation sector within the country where the project located. In case of projects with regional scope (e.g. project withinvestments in several countries) the regional catchment area is considered. Market typologies provide the building blocks in the
AIMM system to construct a narrative for how much an IFC intervention is advancing a market objective. These typologies provide a
description of the market gap based on various stages of development for a given sector from least developed to most advanced
and enable the location of the market before and after IFC’s intervention. The table below summarizes the characterizations of themarket for the three most important market attributes.

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MARKETTYPOLOGY

CompetitivenessResilience

HighlyDeveloped

Moderately
Developed− The airport sector is fullycompetitive. State-run
airport entities, if present,
operate in competition withprivate- run entities− Airport sector istechnologically advanced
using the best technology inoperations of its terminals,
air traffic control andsurveillance equipment etc.
− Airport sector has a highlevel of efficiency evidenced
by comparable marginal
cost and tariff structurewith industry benchmarks− Private sector participationin the airport sector alreadyexists− Airport sector is in growthor ‘renewal’ phase, with a
few assets employing
technologies considered to
be BAT.
− There is evidence oftechnology updates inexisting operations or
adoption of cutting-edge
technologies in new airport
operations.
− Country falls short of global
best practice standards inmost of operations orsegments of the market− Private sector participation − 100% state owned; noin airport sector limited
private sector participation;
mainly in ancillary services.
all airport/s in the country
Airport is operated mainly
are state-owned.
by public sector.
Government exercises
direct regulatory and− Airport has an outdated
financial oversight.
technology, much below
BAT standards, in terms of− Airport has an outdated
ICT deployed used intechnology, much below
terminal operation, bag
BAT standards, in terms ofchecking areas, air traffic
ICT deployed used incontrol and surveillanceterminal operation, bag
equipment, etc.
checking areas, air traffic
control and surveillance− Airport tariff structure isequipment, etc.
not competitive and muchhigher than comparators− Airport operates at highand/or industry
marginal cost, due tobenchmarks. High tariffs
rundown or overbuilt
could be a result of limited
airport facilities, inadequate
competition, operational
skills staff alongsideinefficiency, or pooroverstaffing resulting lower
regulation; staffing resulting
productivity and hence
lower productivity andmuch higher airport fee
hence a much higher
airport fee− Country has extensive
routes to the rest of theworld and all its regions arewell connected via airtransport services− Country is not dependent
on a single airport andthere is adequate
redundant capacity todivert air traffic in case of
disruptions in one airport or
terminal− Sector may be exposed toexternal shocks but isstructurally well preparedto effectively manage thisrisk
− Full cost recovery is in placewith both CAPEX andoperational costs fully
recovered. No reliance on
government subsidies.
− A comprehensive airport
regulatory framework is inplace and enforced.
− Regulatory entity and otherairport regulation
enforcement bodies are
well-equipped to
implement the regulation.
− There is adequate
autonomy of regulatory
bodies− Country has goodcoverage/route ofconnection globally. Yet,
there are region/s in the
country have limited accessto air transport. Theremight also be remote areasthat are not easily
accessible be roads− Airport may face significant
resilience risks, but somemeasures have alreadybeen adopted to manage
these risks− Evidence of airport
infrastructure investments
mitigate risk of adverse
weather conditions or
emerging security threats− Airport infrastructure costs
may be partly subsidized;
however, the airport
operates in commerciallyand face limited/no
financial sustainability risk
− Regulatory framework for
airport exists outlining ruleswith respect to ownershipof assets, private sector
participation, competition,
pricing, in addition to
airport security, health,safety and sustainability
rules. But, regulatory gaps
arising from missing
elements of the framework− Country has limited
coverage/route ofconnection globally. There
are also region/s in the
country have limited accessto air transport. Theremight also be remote areasthat are not easily
accessible be roads− Airport faces significant
resilience risks from natural
disasters and adverse
weather conditions or
security threats. There arelimited systems andinfrastructure capability to
manage these risks− Airport is inefficiently
managed and operated andfailing to fully recover costs
thereby facing financial
sustainability risk
− There is an incomplete
airport regulation, or
regulation is obsolete,inconsistent withinternational standard− Airport regulatory entityand other airport regulation
enforcement bodies lackcapacity to fully andeffectively enforce theexisting regulation

5

Underdeveloped

HighlyUnderdeveloped− Country has very limited
coverage/route ofconnection globally. There
are also region/s in the
country with no access to
air transport There mightalso be remote areas thatare not easily accessible beroads− Airport sector is poorly
regulated, regulation is nonexistent, weak or obsolete.
− The sector has highexposure to exogenous
shocks with no mitigation
mechanisms.
− Business case for climate
resilience technologies orpractices has not been
made

MARKETTYPOLOGY

Integration

HighlyDeveloped

Moderately
Developed− Airport services connecting
domestic & international air
traffic are well developedand its airport safety
standards is excellent− Well-developed airport
cargo facilities to facilitate
specialized exports andimports− Full integration of the
airport sector into thedomestic economy (welldeveloped local supply
chain)− Airport operations are welllinked to local economic
hubs− Financing instruments for
airport projects such as
corporate bonds andcommercial loans are easily
utilized and recognized in
the market− Airport services connecting
domestic & international air
traffic are developed andairport safety standards isgood− Adequate gateway
infrastructure; still uses faceconstraint in its airport
cargo facilities for
specialized export/imports;some linkages to thedomestic economy
including a developed but
incomplete supply chain
and some level of local
value addition to thedownstream industries− Project financing available
by commercial banks. Yet,
institutional investors have
limited or no access toproject finance; nascentbond market with limited
corporates financing

Underdeveloped

HighlyUnderdeveloped− Airport services connecting − Airport services are highly
domestic & international air
underdeveloped withtraffic are not welllimited infrastructure anddeveloped, only serving
hence capacity
fewer routes and the− There is limited access to
airport safety is worrisome
domestic and global capital
markets to the airport− Significant capacity
constraints in its airport
sectorcargo facilities for
specialized exports andimports with the regionaland global market− No local capacity in project
development or EPC
contracting for airport
projects− Minimal loans to corporates
are available from privatebanks or other intermediaryinvestors

The market component rating is based on the current market stage and movement along the market typologies. For each relevantmarket outcome, the individual market creation assessment will identify where the magnitude of the movement falls in the
movement spectrum and will support one of the following movement options: “Marginal”, “Meaningful”, “Significant” or “Highly
Significant”. In general, most individual projects are not expected to make a significant and immediate systemic market change, unlessthe project is a pioneer in a non-existent or nascent market. Instead, most projects are expected to have incremental effects on themarket. In other words, it takes more than one intervention to move a market to the next stage. This means that integrated andconcerted efforts are often needed to generate substantial market effects. For example, cumulative World Bank Group efforts overtime will have a stronger effect on markets than non-integrated and non-concerted interventions. Where a project is explicitly part ofa programmatic approach, the expected movement induced by the program should be the basis for the assessment where timeboundmovements, market effects, and indicators are available. Examples of market movements include:
MARKET
MOVEMENT

Marginal

Meaningful

Significant

Highly Significant

Competitiveness− Support entry of a new player into the airport sector through a full and partial privatization of a state -owned airport− Support acquisition and/or transfer of management of the airport to the private player− Introduce new technology that improves the efficiency and safety of the airport services− Introduce new industry standards in airport operations and management and/or enforcement by regulator− Improve cost efficiency by promoting successful restructuring and/or planning capacity of the airport− Support implementation of new tariff structures that contribute to financial sustainability and competitiveness of the sector

Resilience− Diversify the country’s access options to domestic and international routes (e.g. new alternative airport)− Develop new infrastructure development/upgrade that improve resilience to adverse weather conditions/natural disasters− Develop new infrastructure / systems that improve airport security− Improve cost recovery and/or financial sustainability of the airport− Strengthen the legal and institutional framework for the sector. Support the implementation of airport sector reforms.
− Capacity building for regulatory entity and other regulation bodies with impact on relevant targeted performance indicators

Integration− Support spatial integration by expanding access to airport services increasing the air traffic capacity and connectivity− Construction of new airport infrastructure linking a remote area to economic center with potential to catalyze other industries− Development of shared infrastructure− Development of local supply chain and local downstream industries.
− Support innovative financing products such as Green Bonds issuance with potential for replication by other companies

The market likelihood adjustment follows the principles for the likelihood adjustment for project outcome potential. In general, thelikelihood assessment includes sector-specific, as well as broad country risks that may prevent potential catalytic effects from6

occurring, plus political economy or policy/regulatory risks that may constrain market systemic change. Due to the diversity of market
creation attributes and channels, most of the likelihood factors are expected to be sector, or intervention specific.
MARKET
LIKELIHOOD

Assessment
Considerations

Sector Factors

Political / Regulatory / Policy Factors• Public partner track record in meeting contractual obligations• Presence of funded plan for the development ofcomplementary infrastructure• Extent of political support and social buy-in• Financial viability in the absence of subsidies• Coherence of specific policies and standards across borders• Presence of established and well-tested regulatory and legal
framework• Existence of a capable and independent regulator• Government track record in upholding new policies(measuring risk of policy reversals)• Regulatory scope and capacity• Collaboration track record of participating countries/entities• Availability of WB technical assistance to improve policies andregulatory capacity• Availability WB support to improve sector frameworks andpublic institutional capacity7