(Adds quotes, details of financing plan)
By Alexandra Alper and Cyntia Barrera
MEXICO CITY, Aug 12 (Reuters) - Investor demand to help fund a planned $13 billion airport for Mexico's capital means the private sector could finance as much as 70 percent of the project, up from an initial government estimate of 42 percent, a source familiar with the situation told Reuters on Wednesday.
Last September, Mexico's government unveiled the winning design by renowned British architect Norman Foster for a new, futuristic airport nestled in the northeastern part of the capital that will ease delays and boost traffic.
Officials had originally said the government would finance about 58 percent of the project, with 42 percent form bonds and loans. But Mexico's finance ministry has said it will rein in spending next year as oil prices have swooned and production at ailing state oil giant Pemex has slumped, raising the specter of seeking more project financing from investors.
A hike in market participation could mean raising bond issuance for the project to around $9 billion from an originally forecast of $6 billion, with maturities of 10, 20 and 30 years, said the source.
The $6 billion in bonds was originally designed to cover $3 billion in bank loans coming due, plus provide an additional $3 billion in cash flow for further construction costs.
But the loan amount could also increase, the source said, adding that officials expect to meet with around 50 banks this week to discuss the topic.
After all is said and done, private sector financing could raise "up to 70 percent of the $13 billion without any complications," the source said, speaking on condition of anonymity and citing sensitivities around the project's financing plan. "Everything will be linked to cash flow needs and the cost of financing."
"There is a great deal of appetite for the bonds," the source added.
Tenders for project infrastructure are on track to start in September, after Mexico said last month it was seeking some $6 billion in bids from contractors to build the airport.
Private and development banks could announce in September a plan to offer loans to firms that win contracts for the airport of up to 50 percent of the bid value, the source said. (Additional reporting by Roberto Aguilar; Editing by Simon Gardner and David Gregorio)