HDFC Bank provides Rs 500 crore funding to Jewar Airport project

HDFC Bank has entered into an agreement to provide Rs 500 crore funding to the upcoming Jewar airport in Greater Noida. The funds will be utilized for infrastructure development and land acquisition for the proposed airport that will be Asia’s largest. The funding will be provided at interest cost of Marginal cost of funds based lending rate (MCLR) plus 1%.

With this the Yamuna Expressway Authority 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 Housing & Urban Development Corporation (HUDCO).

The tenure of HDFC’s loan is five years, and the funding amount can be increased later.

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 our future cash flows and that allows us more flexibility in terms of further fund raising. We are planning to raise between Rs 20,000 crore and Rs 25,000 crore through infrastructure bonds,” Arun Vir Singh, CEO, Yamuna Expressway Authority, told ET while confirming the story. “We have achieved the financial closure for the project’s first phase.”

The airport is billed to be the biggest in India with six runways upon completion. The first phase of the project will be spread over an area of 1,334 hectare and is expected to cost over Rs 4,500 crore. The construction work at the project is expected to start in 2021, while commencement of operations is scheduled for beginning of 2024.

ET’s email query to HDFC Bank remained unanswered until the time of going to press.

In July, 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 would 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 Ltd (NIAL), part of Yamuna Expressway Authority, has entered into an agreement with Swiss developer Zurich Airport International for the development of this airport. A concession agreement has also been inked between Uttar Pradesh government’s agency and the Yamuna International Airport Private Ltd, a special purpose vehicle 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), handcraft and a film city.