GMR Infrastructure Limited has announced that its subsidiary GMR Airports Limited, in consortium with TERNA Group, has signed the concession agreement for the design, construction, financing, operation, maintenance and exploitation of a new international airport in Heraklion, located in Crete, Greece.

The new airport will replace the existing Heraklion airport, the second-largest airport in Greece. With registered traffic growth at a compound annual growth rate of 10% over the past three years, the airport is facing severe capacity constraints.

The consortium intends to invest over EUR500 million (US$568.4 million) in the development of the new airport. The entire project will be funded through a mix of equity, accruals from the existing airport and a financial grant being provided by the Government of Greece.

The concession period for the project is 35 years. This includes an initial five-year construction phase.