BIAL secures £1.1bn financing for Kempegowda airport expansion project in India
August 08, 2019 – Bangalore International Airport Limited (BIAL) has raised INR102.06bn (£1.1bn), marking the financial closure of the INR133.52bn (£1.5bn) expansion of the Kempegowda International Airport, Bengaluru (KIAB) in the Indian state of Karnataka.
The BIAL raised the funds from a consortium of banks, including State Bank of India and Axis Bank.
Axis Bank has offered INR51.06bn (£590.2m), while SBI granted INR51bn (£590m) for the expansion project.
BIAL, which operates the Kempegowda Airport, said that it will repay the loan over the next 10 years, with a one-year moratorium after completion of the project.
BIAL managing director and CEO Hari Marar said: “The timely financial closure will now enable us to focus on expansion and ensure that the projects are delivered within timelines.
“Our aim is to ensure that we not only deliver an iconic asset of which the people can be truly proud, but also set benchmarks in the way such projects are delivered – at a cost that is affordable and to the highest standards of corporate governance.”
Scheduled for completion by mid-2021, the expansion project involves the construction of a new terminal and a second runway. It will be funded in a debt-equity ratio of 80:20.
State Bank of India commercial clients group deputy managing director PN Prasad said: “SBI, being the existing lender to BIAL, has already funded certain portion of the phase two project, including earthworks for the runway to the extent of around Rs 500 Cr and the balance debt amount is being funded currently by SBI as the Lead Bank along with Axis Bank.”
The expansion also involves the construction of access roads and a multi-modal transport hub.
BIAL is a joint venture in which Fairfax has a 54% stake, Siemens Projects Ventures 20%, and the Karnataka Government and the Airports Authority of India (AAI) 13% each.
BLR Airport handled 33.3 million passengers during the year 2018-19.