By Yeshi Seli. Assistant Editor, Business India

This Navratri Prime Minister Narendra Modi is likely to lay the foundation stone for Noida International Airport at Jewar, which is around 80 km away from New Delhi.

Touted to emerge as one of the largest airports in the country (on completion), this Rs30,000 crore ($4 billion) project is being developed by the Yamuna International Airport Private Limited (YIAPL). During the financial closure of the project in August this year, YIAPL raised Rs3,725 crore from the State Bank of India, completing the funding of the first phase which will be to develop an area of 1,334 hectares. The first phase is scheduled to be over by 2023.

Noida International Airport Limited (NIAL) is the nodal agency set up by the Uttar Pradesh government for the airport at Jewar. YIAPL will bear the cost of 65 per cent of the airport through funding by SBI and the remaining will be paid by its parent company Zurich Airport International. The project is being funded on a debt-to-equity ratio of 65:35. Zurich Airport International AG (ZAIA), is the main shareholder of YIAPL.

Meanwhile, a financial agreement has been signed between YIAPL, SBI and NIAL. The Rs3,725 crore in debt from SBI will be repaid over a period of 20 years with a one-year moratorium, post completion of the project. This is one of the largest financing projects in any Indian greenfield airport.

YIAPL will pay 65 per cent of the Jewar Airport project cost through funding from SBI, while the remaining money (Rs2,005 crore) will be paid by its parent, Zurich Airport International.

 Losing traffic

For Zurich Airport AG, the contract is important because it is their most significant investment outside Switzerland. Approximately 1 billion Swiss Francs would be invested in this project. Zurich airport has been losing traffic and revenue due to no-fly restrictions on airspace due to the noise disturbance it causes for residents living in proximity of the airport. As a result of this Zurich’s aircraft handling capacity has nearly halved and thereby increased airport operation costs.

All their hopes of increasing their revenue inflow are now dependent on the completion of Noida airport.

So, this airport project is significant for both Uttar Pradesh and Zurich Airport. Once this airport becomes operational a lot of peak traffic from Delhi is expected to be diverted here. This will happen till at least 2030 after which Delhi airport would have increased its capacity to handle more traffic, by then Noida airport too would have been able to carve its own market.