Vasil Levski Sofia Airport has closed a €450 million financing package to build a new Terminal 3 and modernise its existing facilities, with construction due to begin in the autumn of 2026. The deal matters well beyond Bulgaria because of how the money was raised.

It centres on a project-financing bond listed on Euronext Dublin, the first instrument of its kind issued by a Bulgarian entity, combined with private bank debt. For a market that has long struggled to pull sustained private capital into its transport assets, the transaction reads less like a one-off and more like a template that others in the region will now study closely.

The timing was deliberate rather than fortunate. Bulgaria adopted the euro in January 2026, and the airport’s concessionaire, SOF Connect, has positioned the raise as a direct signal of investor confidence in the country’s strengthened macroeconomic standing.

The financing carries a 22-year tenor and attracted institutional investors that had not previously committed capital to Bulgaria, widening the pool of money available to the country’s infrastructure pipeline. Set against a decade of rising passenger numbers and terminals that were never designed for current demand, the package converts a familiar capacity problem into a funded delivery programme with a defined completion horizon.

The structure of the deal is what sets it apart from earlier infrastructure financing in the country. Rather than relying solely on bank lending or multilateral loans, SOF Connect built a package that blends a regulated market-listed bond with private bank debt, comprising refinancing bonds, capital-expenditure bonds and a capex loan facility.

The bonds carry a 22-year tenor and are listed on Euronext Dublin, marking the first time a Bulgarian entity has issued this type of debt instrument. A delayed draw mechanism sits inside the bond financing, allowing capital to be called down in line with the phased construction timetable rather than raised and carried in full from day one, which reduces the cost of holding idle cash across a multi-year build.

For the EBRD, participation served a dual purpose that reflects how development banks increasingly operate in maturing markets. The bank subscribed €50 million across two senior notes, split between the refinancing bonds that strengthen the airport’s long-term capital structure and the capex bonds that fund the upgrade programme. Its presence acted as a credit enhancer for private bond investors, several of whom were entering the Bulgarian market for the first time.

Elena Gordeeva, the EBRD’s Director of Infrastructure Europe, said the institution was “pleased to participate in this landmark transaction. It serves two of our priorities in Bulgaria: supporting more innovative capital market structures that mobilise investors and set new benchmarks in financing, while also improving regional connectivity by helping deliver a modern, competitive airport in Sofia.” The wider point for policymakers is that a well-structured concession can now anchor a bond that draws in capital the state could not have accessed on comparable terms alone.

The commercial logic behind the build rests on traffic that has outgrown the current estate. Sofia Airport handled around 7.1 million passengers in 2019, saw volumes collapse to 2.9 million in 2020 under pandemic restrictions, and has since recovered strongly, surpassing eight million passengers for the first time during 2025. That trajectory has left terminals that were expanded in 2006 handling loads they were never sized for, with the concessionaire acknowledging that facilities had struggled to cope despite successive upgrades.

The new terminal is intended to secure enough capacity to support the airport’s growth for the next three decades, which reframes the project as a long-horizon asset rather than a short-term fix.

Terminal 3 is planned as a 65,000-square-metre facility across four levels, incorporating arrivals, departures, technical operations and more than 10,000 square metres of commercial space, along with 52 check-in counters and modern baggage handling. The design target is a five-star Skytrax rating, which would position Sofia as a leading regional gateway and give it a service benchmark few airports in the wider Balkans currently hold.

The broader plan repurposes the historic Terminal 1 for private, executive and fixed-base operations while preserving it as a landmark, and continues the modernisation of Terminal 2. Construction is scheduled to begin in autumn 2026 with completion targeted before 2030, a timeline that aligns the physical delivery with the drawdown profile embedded in the financing.

The transaction is the latest stage in a public-private partnership that traces back to the last decade. With support from the EBRD’s Infrastructure Project Preparation Facility and the International Finance Corporation, the Bulgarian government tendered a 35-year concession for its main airport, and SOF Connect took over operations in April 2021.

The concessionaire is owned by the French infrastructure fund Meridiam, with the EBRD holding a minority indirect stake through Meridiam investment vehicles. Under the concession, the operator paid an upfront fee to the state and committed to invest a minimum of €624 million across the life of the agreement, of which Terminal 3 is the single largest element. The concession remains the largest in Bulgaria’s transport sector and the first major partnership of its kind undertaken in the country in more than two decades.

The EBRD’s staged involvement illustrates how patient institutional capital can carry a project from procurement to delivery. Having helped prepare the tender, the bank contributed €50 million to a €250 million debt package in 2021, then followed with €57.9 million of indirect equity and a further €16.3 million of contingent equity, bringing its total commitment at that stage to €74.2 million.

The current bond subscription builds on that base by helping the concessionaire refinance existing debt on longer terms while funding new capital works. Jesus Caballero, chief executive of SOF Connect, described the raise as “a powerful illustration of what can be achieved through a successful public-private partnership. By investing with a long-term vision, we are strengthening Bulgaria’s connectivity, expanding economic opportunity and contributing meaningfully to the country’s sustainable development for decades to come.”

The pattern of preparation, debt, equity and then capital-markets access is one that other Eastern European governments will find instructive as they weigh how to fund ageing transport estates without loading the balance sheet of the state.

Environmental commitments are woven through the concession rather than bolted on, and they carry commercial weight in an era of tightening aviation regulation. The operator has committed to making the airport fully carbon neutral by 2036, with more than €50 million earmarked for decarbonisation measures that include eliminating direct greenhouse gas emissions and making alternative fuels available to airlines.

Meridiam has also committed to improving corporate climate governance and to applying the recommendations of the Task Force on Climate-related Financial Disclosures, aligning the asset with the reporting expectations of the institutional investors now holding its debt. For a terminal being built to operate into the 2050s and beyond, designing to those standards from the outset is cheaper than retrofitting later.

The sustainability agenda also feeds directly into the competitive positioning of the airport. The five-star ambition and the carbon-neutral target are presented together as a single proposition to airlines and passengers, one that seeks to differentiate Sofia from regional rivals competing for the same route networks.

Airlines increasingly factor an airport’s environmental credentials and passenger experience into route decisions, particularly as European carriers face their own emissions obligations. By tying green performance to service quality, the concessionaire is treating decarbonisation as part of the airport’s commercial offer rather than a cost centre, which is likely to shape how future regional concessions in the region are specified and marketed.

The wider significance of the deal lies in what it demonstrates about deliverability. A credible concessionaire model backed by committed private capital has unlocked a terminal that purely state-led procurement has repeatedly struggled to bring forward elsewhere. The contrast with Bucharest, where a long-debated new terminal has moved slowly through planning despite comparable passenger-growth pressures, underlines the point that structure and capital discipline can matter as much as demand.

Sofia has shown that a mid-sized Eastern European gateway can raise long-dated capital on international markets, attract first-time institutional investors and tie the proceeds to a defined construction programme, all within a partnership framework that keeps the asset in public ownership while transferring delivery risk to the private sector.

For construction firms, suppliers and investors, the read-through is concrete. A funded Terminal 3 with a firm start date creates a substantial procurement opportunity for civil contractors, baggage-handling specialists and terminal-systems integrators across the second half of the decade.

For policymakers across the region, the transaction offers a working precedent for financing large transport assets through blended structures that combine multilateral support, private bank debt and listed bonds. Bulgaria’s eurozone entry has clearly sharpened the appeal, but the more durable lesson is that the groundwork laid over the previous decade, from tender preparation to equity participation, is what made the capital markets willing to follow.

Whether other governments can replicate that patience will determine how far the Sofia template travels.