Greenland aims to expand its airports so as to cater to direct flights between Europe and North America. Incidentally, the decision has a strategic angle attached to it as well.
Greenland has picked Denmark as a partner for its planned upgrade of two of its airports. The move is aimed at defusing a diplomatic row over how the infrastructure project, of strategic interest to both China and the United States, should be financed.
Denmark is worried that the self-ruling Arctic island, part of Denmark should not bow to Chinese pressure and take on more Chinese investment which could upset Washington.
Chinese investments in the region has been a concern ever since Greenland’s Prime Minister Kim Kielsen visited Beijing in 2017.
So as to defuse tensions surrounding the airport upgradation projects, Kielsen has agreed to allow Denmark take a 33% stake in the state-owned Kalaallit Airports for $109 million (700 million Danish crowns). The projects will be on the own, build and operate model.
At a meeting with Danish Prime Minister Lars Loekke Rasmussen in Nuuk, Kielsen agreed to let Denmark provide a credit worth 450 million crowns for projects related to the upgradation of the airport and has agreed to provide a state guarantee for another 450 million crowns loan from the Nordic Investment Bank.
The development assumes significance since in January 2018, China had laid out its ambitions to form a “Polar Silk Road” by developing shipping lanes, which opened up due to global warming, and build infrastructure in the Arctic.
A Chinese construction company had appeared on a list of six firms that had shown interest in the projects, whose costs are estimated at 3.6 billion Danish crowns.
As for Greenland, it plans on expanding the airports to cater to direct flights from Europe and North America.
For the United States, Greenland is of strategic importance because of its geographic location. The U.S. military has placed ballistic missile early warning system in the region as it is the shortest route from Europe to North America via the Arctic island.