By seeking up to 300 billion rupees ($3.5 billion) in debt, the developer of building what will become India’s largest port hopes to give lenders an opportunity to finance a crucial part of Prime Minister Narendra Modi’s infrastructure program.
A few hours north of Mumbai, the owners of the Vadhvan Port Project Ltd. are seeking to raise loans with tenors ranging from 15 to 20 years. To raise the money, they are looking at both onshore and offshore markets. Unmesh Sharad Wagh, chairman of the 74%-owned Jawaharlal Nehru Port Authority, or JNPA, stated, “We have begun the process of raising debt, which will happen in two phases.” The remaining 26 percent is owned by the Maharashtra Maritime Board.
For Prime Minister Narendra Modi, who lay the port’s foundation stone last year, the $9 billion port project is a significant effort. According to its supporters, Vadhvan will rank among the top 10 ports in the world when it is finished, which is anticipated to happen by the end of the decade, and will be able to accommodate about 23 million container units. According to Wagh, IDBI Capital was brought in as an advisor to assist in lining up long-term lenders for the initial investment round, which aims to raise at least 220 billion rupees.
Lenders will be asked to submit proposals during the October to December quarter, and the monies will be distributed over the following five years. Wagh, who is also the chairman and managing director of the Vadhvan Port Project, stated that JNPA and MMB will jointly invest roughly 130 billion rupees in the project. According to him, the company is negotiating with multilateral organizations and is attempting to restore 1,200 hectares of land. Modi’s government has made strengthening the nation’s maritime infrastructure a top goal.
The government suggested a Maritime Development Fund in February as part of the nation’s yearly budget to provide financial support for the industry through debt or equity instruments. Since none of India’s ports are deep enough to accommodate them, some of the biggest container ships have been compelled to avoid the country. The 20-meter natural depth of Vadhvan would enable the docking of some of the biggest ships. The so-called India-Middle East-Europe Corridor, a planned economic link intended to provide new commercial channels between the regions, would also begin there.
