Funding for the first phase of the Noida International Airport project has been completed with the signing of a key pact between the stakeholders. The financial agreement was signed between Yamuna International Airport Private Limited (YIAPL), State Bank of India (SBI) and Noida International Airport Limited (NIAL).
The project had garnered interest from several companies including Fairfax India Holdings Corp., GMR Infrastructure, ADAG Group and Adani. SBI came into the picture after Zurich Airport International AG (ZAIA) emerged as the highest bidder and won the contract for the ambitious project. YIAPL is a 100 per cent subsidiary of ZAIA and was incorporated to oversee the development of the airport, which will bring the total number of airports in the National Capital Region to three.
NIAL is the nodal agency specifically set up by the Uttar Pradesh government for this project. The financing agreement, including a substitution and an escrow agreement, was agreed upon and ratified by the signatory parties. According to the deal, SBI will issue a Rs. 3,725 crore loan to YIAPL, repayable over a period of 20 years with one-year moratorium after the completion of the project. The deal is considered to be one of the largest financial agreements undertaken for a greenfield airport project in India.
Entry of private players in the aviation sector, airport operations in particular, has made a positive impact on the industry. The presence of heavyweights like Adani, SBI and now ZAIA, is a huge positive for the sector. The Adani Group, in particular, has emerged as a major player with eight airports under its wing. Its latest acquisition is the Mumbai International Airport Limited (MIAL) with a 74 per cent majority stake in it. Additionally, Jaipur International Airport will be operated wholly by Adani come October 12. The paperwork for the transition has been long completed and this October will see the group handle airport operations in Jaipur for the first time.
The privatization of airports has reached great highs as the government concentrates on strategic disinvestment, in a bid to attract investment and increased capex for various sectors. The presence of stakeholders like Adani SBI is a huge boost for this sector as it takes on new challenges. With the global economy showing signs of recovery, the aviation sector will play a crucial role in India’s revival. What remains to be seen is the extent to which stakeholders can influence the recovery and overall growth of the nation’s economy.
Tags: Adani SBI, Adani Group, ADAG Group, Zurich Airport International.