NIIF to Invest Rs 675 Crore in Andhra Pradeshs Bhogapuram Airport

The National Investment and Infrastructure Fund (NIIF) is set to invest up to Rs 675 crore in the upcoming greenfield international airport at Bhogapuram in Andhra Pradesh, being developed by the GMR group. This marks NIIF's second airport investment after the GMR Goa International Airport Ltd, which operates Manohar International Airport in Goa.

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Binding Agreements for Investment

GMR Airports Ltd (GAL), a subsidiary of GMR Airports Infrastructure Ltd (GAIL), and NIIF have entered into binding agreements for NIIF to invest up to Rs 6.75 billion (Rs 675 crore) in GMR Visakhapatnam International Airport Ltd (GVIAL), as announced by the GMR Group. The transaction involves a primary investment by NIIF in the form of Compulsorily Convertible Debentures (CCDs) to be issued by GVIAL.

Bhogapuram International Airport Project

GVIAL, a special purpose vehicle formed to develop and operate the Bhogapuram International Airport, was awarded the concession in 2020 to develop and operate the Bhogapuram International Airport (BIA) to the north of Visakhapatnam under a 40-year design-build-finance-operate-and-transfer model. BIA, part of the National Infrastructure Pipeline, is poised to become the largest airport in Andhra Pradesh with a phase-I capacity of up to six million passengers annually and an ultimate capacity of up to 40 million passengers per annum.

Financial Partnership and NIIF's Commitment

This investment is part of the financial partnership announced in December 2021 between the parties, concerning NIIF's investment in the equity capital of three airport projects of GMR Airports Ltd. Vinod Giri, Managing Partner for Master Fund at National Investment and Infrastructure Fund Ltd, emphasized NIIF's commitment to participating in the implementation of the government's ambitious National Infrastructure Pipeline. He highlighted NIIF's Master Fund as India's largest infrastructure fund with a diversified portfolio across transportation, energy, and digital infrastructure.

Boosting Connectivity and Socio-Economic Growth

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. The GMR group expressed confidence that the BIA project will enhance connectivity and transportation infrastructure in northern Andhra Pradesh. GBS Raju, Business Chairman for Airports at GMR Group, drew parallels with the success of Hyderabad Airport and envisioned the new airport as a catalyst for socio-economic growth in the city and the state. He also emphasized the growing partnership with NIIF as a testament to GMR's credibility as an airport infrastructure developer and the future of the aviation industry in India.

The NIIF's investment in the Bhogapuram greenfield international airport underscores the fund's commitment to supporting infrastructure development in India. The airport project is expected to boost connectivity and contribute to the economic progress of Andhra Pradesh, aligning with the government's National Infrastructure Pipeline initiative.