GMR Airports partners with NIIF for Bhogapuram International Airport development
GMR Airports Limited (GAL), a subsidiary of GMR Airports Infrastructure Limited, and the National Investment and Infrastructure Fund (NIIF) have entered into binding agreements to propel the development of the Bhogapuram International Airport in Andhra Pradesh. NIIF is set to invest up to INR 6.75 billion in GMR Visakhapatnam International Airport Limited (GVIAL), a special purpose vehicle for the airport’s development and operation. This partnership is a continuation of the financial collaboration announced on 7th December 2022, and it represents NIIF’s second airport investment following its investment in GMR Goa International Airport Limited.
Development of Bhogapuram International Airport
GVIAL was awarded the concession in 2020 to develop and operate the greenfield Bhogapuram International Airport (BIA) under a 40-year Design-Build-Finance-Operate-and-Transfer model. BIA, a crucial part of the National Infrastructure Pipeline, is set to become Andhra Pradesh’s largest airport, with a phase I capacity of up to 6 million passengers per annum, scaling up to 40 million passengers annually. NIIF’s investment will be in the form of Compulsorily Convertible Debentures (CCDs) issued by GVIAL, subject to customary conditions and approvals.
Bhogapuram International Airport : NIIF Invests INR 6.75 Billion in GMR’s New Greenfield Airport Project in Andhra Pradesh
Impacting Regional Connectivity and Economic Development
BIA is poised to significantly enhance air travel potential in the Visakhapatnam region and provide world-class passenger infrastructure. The project aligns with national priorities of improving air travel penetration and connectivity, particularly to Tier 2 and Tier 3 cities. GVIAL is expected to be a key driver of economic growth and development in Andhra Pradesh over the medium to long term.
Statements from Industry Leaders
GBS Raju, Business Chairman – Airports, GMR Group, expressed confidence in replicating the success of Hyderabad Airport and the transformative potential of the new Bhogapuram airport for Visakhapatnam and the state. Vinod Giri, Managing Partner – Master Fund, NIIF Limited, highlighted the project’s pivotal role in the region’s economic progress and NIIF’s commitment to India’s National Infrastructure Pipeline.
NIIF’s Continued Investment in India’s Aviation Sector
NIIF’s Master Fund, India’s largest infrastructure fund, demonstrates its commitment to India’s ambitious infrastructure goals with its second airport project investment. This move underscores NIIF’s strategy to participate actively in India’s burgeoning aviation sector and infrastructure development.
Conclusion: A Milestone for Aviation Infrastructure
The strategic partnership between GMR Airports Limited and NIIF in developing the Bhogapuram International Airport marks a significant step in enhancing aviation infrastructure in India. The project is anticipated to transform regional connectivity and contribute substantially to the socio-economic growth of Andhra Pradesh, setting new benchmarks in the aviation industry.