JNPT signs US$400m funding
The Jawaharlal Nehru Port Trust (JNPT) in Navi Mumbai has signed an agreement with State Bank of India (SBI) and Development Bank of Singapore (DBS) for External Commercial Borrowing (ECB) of US$400 million for expansion programme.
The $300 million from SBI and $100 million DBS will be used to improve the infrastructure required for “doubling” its existing capacity to 9.85 million TEUs annually.
JNPT has US Dollar denominated foreign currency earnings which can be leveraged for a low cost foreign currency borrowing.
Mumbai JNPT Port Road Company Limited will undertake the Rs. 2895 crore project on engineering, procurement and construction basis.
It is the first of its kind model funding by is the first of its kind for major port and opens up one more avenue for major and government ports to raise funds by accessing international markets for their requirements.
The borrowing is in line with suggestions from Minister of Shipping and Road Transport & Highways Nitin Gadkari who had called for innovative means of raising low-cost external commercial borrowings, particularly when the port had revenues in foreign exchange, which provided a natural hedge to the ports.
This would substantially eliminate the requirement of hedging the forex risk and would reduce the cost of borrowing. fii-news.com
