Hyderabad, Feb 22 (IANS): GMR Airports Limited, along with its Greek partner Terna Group, will develop the new international airport of Heraklion at Crete, Greece.

On Friday, the consortium signed a concession agreement for design, construction, financing, operation, maintenance and exploitation of the new airport for a period of 35 years, including five years of its first phase construction.

Located in Greece's largest and most visited island of Crete, Heraklion airport is the second largest in that country and has registered traffic growth at a CAGR of 10 per cent per annum over the past three years.

The existing airport is facing a severe capacity constraint and will be replaced by the new airport at Crete.

The consortium intends to invest over 500 million Euros for development of the new airport. The entire project will be funded through a mix of equity, accruals from the existing airport, and financial grant provided by the government of Greece, said GMR Airports Limited, a subsidiary of GMR Infrastructure Limited.

"This is GMR Group's first foray into the European Union (EU) region and we eagerly look forward to expanding our footprint there. The signing of the Concession Agreement is a significant milestone in the growth journey of GMR Airports and reinforces our leadership position," said Srinivas Bommidala, Business Chairman, Energy and International Airports.

GMR Group's airport portfolio has around 159 million passenger capacity in operation and under development, comprising India's busiest Indira Gandhi International Airport in New Delhi, Hyderabad's Rajiv Gandhi International Airport and the Mactan Cebu International Airport in partnership with Megawide in the Philippines.