Bengaluru: GMR Airports Limited (GAL), a subsidiary of GMR Airports Infrastructure Limited, and NIIF (National Investment and Infrastructure Fund) entered into binding agreements for NIIF to invest up to INR 6.75 billion in GMR Visakhapatnam International Airport Limited (GVIAL), a special purpose vehicle to develop and operate the Bhogapuram International Airport. This investment is part of the financial partnership announced on 7th December 2022 between the parties, in relation to investment by NIIF in the equity capital of three airport projects of GMR Airports Limited. This marks NIIF’s second airport investment, after its investment in GMR Goa International Airport Limited, which operates Manohar International Airport in Goa, was completed in April 2023.
GVIAL, in 2020, was awarded the concession to develop and operate the greenfield Bhogapuram International Airport (BIA) to the north of Visakhapatnam under a 40-year Design-Build-Finance-Operate-and-Transfer model. BIA, a part of the National Infrastructure Pipeline, is poised to become the largest airport in the state of Andhra Pradesh with a phase I capacity of up to 6 million passengers per annum and with an ultimate capacity of up to 40 million passengers per annum. The transaction envisages a primary investment by NIIF in the form of Compulsorily Convertible Debentures (CCDs) to be issued by GVIAL. The transaction is subject to customary completion of conditions precedent and necessary approvals.
BIA will provide vital infrastructure to deliver a world-class passenger experience in Andhra Pradesh while significantly enhancing air travel potential in the Visakhapatnam region. The project is well positioned to boost connectivity and transportation infrastructure in northern Andhra Pradesh and also resonates with national priorities of strengthening air travel penetration and connectivity, especially to Tier 2 and Tier 3 cities. GVIAL shall be an important engine of Andhra Pradesh’s economic development and growth over the medium to long term.
GBS Raju, Business Chairman – Airports, GMR Group, said, “It is a proud moment for GMR Group to develop the greenfield Bhogapuram International Airport in the State of Andhra Pradesh. We are confident that we will replicate the success of our Hyderabad Airport and the new world class airport will act as the catalyst for the socio-economic growth of the city and the State at large. The new Bhogapuram airport and airport city will help in the transformation of Visakhapatnam and will place it on the global map as the most preferred investment destination. Our growing partnership with NIIF is a further testament of GMR’s credibility as an Airport Infrastructure developer and the future of the Aviation industry in the country.”
Vinod Giri, Managing Partner – Master Fund, National Investment and Infrastructure Fund Limited, said, “NIIF believes that Bhogapuram International Airport will strengthen aviation infrastructure in Andhra Pradesh, playing a pivotal role in the region’s economic progress in the coming years. NIIF’s Master Fund is India’s largest infrastructure fund with a robust and well-diversified portfolio across transportation, energy and digital infrastructure. NIIF’s investment in GVIAL represents the Fund’s second airport project, underscoring our commitment to participate in the implementation of Government of India’s ambitious National Infrastructure Pipeline.”