GMR Airports Limited, a subsidiary of GMR Airports Infrastructure Limited, and National Investment and Infrastructure Fund (NIIF) entered into binding agreements for NIIF to invest up to Rs 6.75 billion in GMR Visakhapatnam International Airport Limited (GVIAL), a special purpose vehicle to develop and operate the greenfield Bhogapuram International Airport (BIA). This investment is part of the financial partnership announced on December 7, 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 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 Andhra Pradesh with a phase 1 capacity of up to 6 million passengers per annum (mppa) and an ultimate capacity of up to 40 mppa. The transaction envisages a primary investment by NIIF in the form of compulsory convertible debentures 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.