GMR Airports Limited (GAL), a subsidiary of GMR Airports Infrastructure Limited, and the National Investment and Infrastructure Fund (NIIF) have finalized agreements for NIIF to invest up to INR 6.75 billion in GMR Visakhapatnam International Airport Limited (GVIAL), a special purpose vehicle responsible for developing and operating the Bhogapuram International Airport in Andhra Pradesh. This investment is part of the financial collaboration announced on December 7, 2022, between the two entities, focusing on NIIF’s investment in the equity capital of three airport projects under GMR Airports Limited. Notably, this marks NIIF’s second airport investment, following its successful investment in GMR Goa International Airport Limited, the operator of Manohar International Airport in Goa, which was completed in April 2023.
GVIAL was awarded the concession in 2020 to develop and operate the Bhogapuram International Airport (BIA), a greenfield project located to the north of Visakhapatnam, under a 40-year Design-Build-Finance-Operate-and-Transfer model. BIA, a crucial component of the National Infrastructure Pipeline, is poised to become the largest airport in Andhra Pradesh, initially with a capacity of up to 6 million passengers per annum and an ultimate capacity of up to 40 million passengers per annum. The transaction involves NIIF’s primary investment in the form of Compulsorily Convertible Debentures (CCDs) issued by GVIAL, subject to customary completion of conditions precedent and necessary approvals.
BIA is anticipated to provide essential infrastructure for a world-class passenger experience in Andhra Pradesh while significantly enhancing air travel potential in the Visakhapatnam region. The project aligns with national priorities of strengthening air travel penetration and connectivity, especially to Tier 2 and Tier 3 cities. GVIAL is expected to play a crucial role in Andhra Pradesh’s economic development over the medium to long term.
Mr. GBS Raju, Business Chairman – Airports, GMR Group, expressed pride in the development of the Bhogapuram International Airport, foreseeing it as a catalyst for the socio-economic growth of the city and the state. He highlighted the transformative impact the new airport and airport city would have on Visakhapatnam, positioning it as a preferred global investment destination. The growing partnership with NIIF reflects GMR’s credibility as an Airport Infrastructure developer and the promising future of the aviation industry in India.
Mr. Vinod Giri, Managing Partner – Master Fund, National Investment and Infrastructure Fund Limited
Mr. Vinod Giri, Managing Partner – Master Fund, National Investment and Infrastructure Fund Limited, emphasized NIIF’s belief that Bhogapuram International Airport will strengthen aviation infrastructure in Andhra Pradesh, contributing significantly to the region’s economic progress in the coming years. He underscored NIIF’s commitment to participating in the implementation of the Government of India’s ambitious National Infrastructure Pipeline, with this investment marking the Fund’s second airport project.
GVIAL is promoted by GAL, a prominent private sector airport operator formed as a partnership between India’s GMR Group and Groupe ADP, with majority equity held by the French government. GAL has an extensive track record, having developed and operated airports in over nine countries, and presently managing six airports across India, Indonesia, and the Philippines. GAL is also awaiting the signing of the concession agreement for Nagpur Airport, a brownfield project.
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