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Transforming Cyprus’ Airports: Government And Hermes Sign Landmark Agreement

by THEFUTURE.TEAM

The Cyprus government and Hermes Airports have formalised a landmark agreement to initiate the second phase of development for Larnaca and Paphos international airports. Signed at the Presidential Palace, the agreement also resolves longstanding disputes related to the airports’ concession.

Transport Minister Alexis Vafeades described the deal as a critical step in enhancing public interest. The ambitious plan involves simultaneous construction projects at both airports, commencing in late Q1 2025. These works depend on finalising loan agreements with banks and securing necessary planning approvals.

Minister Vafeades and Hermes CEO Eleni Kalogirou hailed the agreement as transformative for Cyprus’ tourism, local communities, and economy. Currently, both airports collaborate with 55 airlines, connecting Cyprus to 38 countries through 156 routes.

Key Updates And Developments

The upgrades will significantly expand both airports’ capacities:

  • Larnaca Airport: Expansion of the terminal by approximately 20,000 square metres, new passenger boarding gates with a connected wing, and increased aircraft parking spaces. Completion is expected within 30 months.
  • Paphos Airport: A 30% expansion of the terminal area and extension of the southern parallel taxiway to enhance safety and capacity. Completion is targeted within 27 months.

Upon completion, the airports will collectively serve over 17.4 million passengers annually, a 43% increase from the expected 12.2 million passengers in 2024.

Financial And Legal Agreements

Negotiations resulted in extending the concession agreement by 18 months and settling disputes:

  • €30 million in compensation paid by the Republic of Cyprus.
  • A €20 million loan from the Republic to Hermes Airports in exchange for withdrawing claims related to the illegal Tymbou airport in the Turkish-occupied north.
  • The upgrades impose no additional financial burden on public funds, relying instead on private financing and the concession extension.

Economic Impact

The development builds on the airports’ historical success:

  • Larnaca and Paphos airports were constructed with a €640 million investment.
  • Over 18 years, the Republic of Cyprus has collected €607 million in concession fees from Hermes Airports.
  • The agreement underscores Cyprus’ readiness for further investment and connectivity growth.

The upgrades aim to improve passenger comfort and experience at every stage, adopting modern management practices to handle increasing traffic efficiently.

Airports will serve over 17.4 million passengers annually, bolster Cyprus’ international standing, and foster economic growth without burdening public finances.

MENA Venture Capital Stable As International Investor Activity Shifts

by THEFUTURE.TEAM

A Data-Led Analysis Of Investor Behavior In A War-Affected Region

Venture capital activity in the Middle East and North Africa remained relatively stable one month after the escalation of regional conflict. Early data, however, indicate changes in investor behavior rather than immediate shifts in funding totals. Initial signals are visible in investor participation, capital allocation, and deal pipeline activity.

Venture Markets And The Lag In Response

Funding announcements reflect decisions made months earlier, meaning that today’s figures do not capture the full impact of current events. Investors typically adjust strategies gradually, signaling future shifts long before they are immediately visible in total funding numbers.

International Capital As The Key Pressure Indicator

Participation of international investors remains a key indicator across the MENA venture market. Global capital has historically accounted for a significant share of funding in the region. Following global interest rate increases, international participation declined through 2023. This shift was reflected in lower cross-border deal activity, more cautious capital deployment, and longer fundraising timelines.

Implications For The Broader Startup Ecosystem

Changes in international investor activity affect multiple parts of the startup ecosystem. A recovery in participation was recorded in 2024 and continued into 2025, supporting funding activity and cross-border investment. If uncertainty persists, potential effects include slower investment decisions, reduced cross-border engagement, and extended fundraising cycles. International capital also plays a role in supporting larger funding rounds and access to global networks.

Next Steps For Stakeholders

International capital represents one of several factors shaping venture activity in the region. Its movement often precedes changes in late-stage funding, startup formation, and exit activity. Investors, policymakers, and ecosystem participants rely on data and scenario analysis to assess these trends and adjust strategies.

For A Deeper Insight

Further analysis on venture activity, capital flows, and geopolitical impact across the region is available in the full MAGNiTT report.

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