Source: ET Infra
The National Bank for Financing Infrastructure and Development and Axis Bank have agreed to extend term loan facility of Rs1,750 crores each to the project with Axis Bank approving another Rs140 crore as guarantee facility and Rs150 crores as hedge facility, enabling DP World to achieve financial closure for the project, the sources said.
This will be the first loan to be sanctioned by the union government backed NaBFID, India’s newest infra lender, to the port sector after it started operations in 2022. NaBFID is a development finance institution set up to help fill the gap in infrastructure financing after commercial banks withdrew from the sector in the wake of large defaults between 2010 and 2015.
In August last year, Hindustan Infralog Pvt Ltd, the Indian unit of DP World, signed a concession agreement with Deendayal Port Authority – the state-owned entity that runs the port at Kandla in Gujarat – to implement the mega project at Tuna-Tekra, a satellite facility located some 15 kms away.
DP World placed the highest royalty of Rs6,500 per TEU to emerge the successful bidder for the project, in a global bid that stunned the port industry.
“DP World has received confirmation from NaBFID and Axis Bank to fund the project,” said an official with the Ministry of Ports, Shipping and Waterways that controls Deendayal Port Authority, one of the 12 ports owned by the Union government. “DP World will be signing the loan agreement with the banks soon,” he stated.
Private firms winning bids to develop cargo handling terminals at major ports on public-private-partnership (PPP) model have to achieve financial closure for the project within six months of signing the concession agreement, per the model concession agreement for the port sector finalised by the government.
DP World has also submitted the performance bank guarantee for Rs127 crores for the project to Deendayal Port Authority last week, the Ministry official said. The port authority and the terminal developer have also signed an agreement to open an escrow account, per the terms of the concession agreement.
Hindustan Infralog will thus fulfil all the conditions precedent related to the project, clearing the decks for implementing the container handling facility, the Ministry official said.
