India-based GMR Airports, along with partner infrastructure firm Terna, has achieved the concession commencement date to design, construct, finance, operate and maintain Kastelli Airport in Heraklion, Crete, Greece.

The foundation stone was laid by Greek Prime Minister Kyriakos Mitsotakis, which marked the start of the airport project.

In 2017, the consortium was selected to develop, operate and manage the new Kastelli International Airport.

The companies signed the concession agreement to operate the airport for 35 years, which includes the Phase I construction period of five years.

The consortium plans to invest around €500m to develop the new airport.

The project funding will be provided by grants from the Greek Government, along with equity and accruals from the existing airport, and is not expected to incur any debt.

A major international tourist destination, Greece serves around 33 million annual tourists, with Crete Island as one of its most visited regions.

The current Heraklion Airport is Greece’s second-busiest international airport and is operating at overcapacity.

GMR Group Energy and International Airports chairman Srinivas Bommidala said: “GMR is the first Indian airport operator to win bid to operate a European airport and also GMR Group’s first foray in the EU region. It is a matter of great pride for us to work on this prestigious airport project.

“Along with our partner GEK Terna, we aim to deliver an airport of global standards which would be a matter of pride for Greece.”

Last month, the European Investment Bank (EIB) sanctioned a €180m loan for the construction of the new airport.

Granted for a period of 28 years, the loan will support the contribution of the state for the airport construction.