"GMR Secures ₹4,000-Cr Loan for Vizag International Airport Construction"

Indian conglomerate GMR is set to embark on the construction of a state-of-the-art greenfield international airport in Vizag, with the aid of a substantial Rs. 4,000-crore loan, as reported by The Economic Times (ET). The funding for this ambitious project is facilitated by a consortium led by the India Infrastructure Finance Company (IIFCL).

Once completed, the Vizag airport will mark GMR's fourth major airport venture in the country, joining the ranks of Delhi, Hyderabad, and Goa in the conglomerate's aviation portfolio. This endeavor is a significant aspect of GMR's broader strategy to enhance its presence in the aviation facilities sector, following a company restructuring that resulted in its division into two separate listed firms two years ago.

PR Jaishankar, the Managing Director of IIFCL, emphasized that the wholly-owned Government of India company is actively involved in spearheading financing initiatives for future greenfield airport developments across the nation. Notably, IIFCL has already taken a lead role in partially financing the Bhogapuram airport project in Andhra Pradesh.

The Vizag airport, situated outside the city in Bhogapuram, encompasses more than 2,200 acres and is positioned as an alternative to the existing airport, primarily established to cater to the needs of the armed forces. The loan, authorized by IIFCL, spans a 14-year period and carries an interest cost of approximately 10 percent annually. It includes moratorium periods for repayment during the airport's construction phase and for one year following its operational launch. Additional sources have indicated that other financial institutions, including REC, PFC, and public sector banks, are likely to join the banking consortium.

Upon the project's completion in all three phases, the Vizag airport will have the capacity to serve 40 million passengers annually. GMR's strategic decision to focus on its aviation ventures has solidified its position as a prominent player in India's infrastructure landscape, while its non-airport businesses have been consolidated into a separate listed entity known as GMR Power and Urban Infra, encompassing special economic zones (SEZ), power generation, and road-related ventures.

BS