HDFC Bank has entered into an agreement to provide Rs 500 crore funding to the upcoming Jewar international airport in Greater Noida, Uttar Pradesh.
The funds will be utilised for infrastructure development and land acquisition for the proposed airport that will be Asia’s largest. The funding will be provided at interest of marginal cost of funds-based lending rate (MCLR) plus one percent.
With this pact, the Yamuna Expressway Industrial Development Authority (YEIDA) that is developing the 5,000 acre airport in Gautam Budh Nagar district of western Uttar Pradesh has secured financial assistance worth over Rs 4,500 crore, including a funding from the Housing & Urban Development Corporation (HUDCO).
The tenure of HDFC’s loan is five years, and the funding amount can be increased later on.
The project is estimated to cost over Rs 29,500 crore and the authority is looking to raise additional funds through issuance of infrastructure bonds soon.
The HDFC funding is not linked to future cash flows and allows more flexibility in terms of further fund raising. YEIDA is planning to raise between Rs 20,000 crore and Rs 25,000 crore through infrastructure bonds. It has achieved financial closure for the project’s Phase-I.
The airport is billed to be the biggest in India with six runways upon completion. Phase-I of the project will be spread over an area of 1,334 ha and is expected to cost over Rs 4,500 crore. The construction work is expected to start in 2021, while commencement of operations is scheduled for early 2024.
In July 2020, the authority and HUDCO entered into a pact for financial assistance worth over Rs 4,000 crore for various projects adjoining the upcoming international airport. These will include land acquisition and associated infrastructure development on both sides of the Yamuna Expressway over the next three years. HUDCO has extended the financial support at the MCLR rate.
The Noida International Airport (NIAL), part of YEIDA, has entered into an agreement with Swiss developer Zurich Airport International for development of the airport.
A concession agreement has also been inked between the Uttar Pradesh government's agency and the Yamuna International Airport, a special purpose vehicle (SPV) floated by the Zurich Airport for the project.
The authority is planning to develop an Aerotropolis around the project, including several industry-specific hubs such as pharmaceuticals, small and medium enterprises (SMEs), handicraft and a film city.