Lima Airport Partners has borrowed $1.25bn for a major upgrade of Jorge Chávez International Airport in Peru’s capital.

The company, which runs the airport on behalf of Frankfurt Airport Services (Fraport), plans to build a second runway, a passenger terminal, a new air traffic control tower, and a utilities complex.

Seven banks in Europe, Japan and Canada are providing the finance. Money raised will also be used to repay a $450m loan obtained in 2020.

“More than ever, well-managed aviation hubs like Lima are highly regarded as critical infrastructure and reliable long-term investments,” said Fraport’s chief finance officer Matthias Zieschang.

A consortium called Inti Punku will do the work. It is led by Spanish contractor Sacyr and its Peruvian partner Cumbra. The terminal is expected to enter service in 2025.