Indian conglomerate GMR has lined up a Rs 4,000-crore loan for the construction of a greenfield international airport at Vizag, according to a report by The Economic Times (ET). An India Infrastructure Finance Company (IIFCL)-led consortium is funding the initiative for the construction group.
The airport in Vizag would become GMR’s fourth major airport in the country after those at Delhi, Hyderabad, and Goa.
After a reorganisation of the company that resulted in its separation into two listed firms two years ago, the new airport in Vizag is part of GMR’s initiative to boost its aviation facilities business.
PR Jaishankar, managing director of IIFCL, told ET that the wholly-owned Government of India company has taken enterprising initiatives to fund the future greenfield airport developments in the country. It has recently taken the lead role in part-financing the Bhogapuram airport in Andhra Pradesh.
Once all three phases are complete, the airport will accommodate 40 million passengers a year.
IIFCL has authorised a 14-year loan being priced at an interest cost of around 10 per cent a year. The loan will require moratoriums on repayment during airport construction and until one year after the airport becomes functional. Sources added that other financiers like REC, PFC and public sector banks are likely to be part of the banking consortium.
The Vizag airport is being constructed outside the city in Bhogapuram, on more than 2,200 acres. It will present an alternative to the existing airport that was built mainly to cater to the needs of the armed forces. In August 2020, GMR announced a split of its airports and non-airports businesses and got the necessary permissions in December 2021.
In 2022, GMR Infrastructure split up into two separate listed companies. The original firm was renamed GMR Airport Infrastructure and houses the airport business. The new firm formed after the split was called GMR Power and Urban Infra and accommodates special economic zones (SEZ), power generation, and road businesses.
