Jawaharlal Nehru Port Trust to sign agreement with bankers for External Commercial Borrowing
Posted on:23 Aug 2016 09:39:15
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23 August 2016 Current Affairs: India’s premier container port, Jawaharlal Nehru Port in Navi Mumbai, has signed an agreement with State Bank of India and Development Bank of Singapore for External Commercial Borrowing to the tune of USD 400 Million at a very competitive" interest rate to improve the infrastructure required for doubling.
The ECB of USD 400 Million ( USD300 Million from the SBI & USD100 from DBS) will be primarily utilised by the JNPT, which has US Dollar denominated foreign currency earnings which can be leveraged for a low cost foreign currency borrowing, for expansion of its existing roads network connecting to its port project as the existing road network for evacuation of traffic is currently operated at a capacity utilisation of 100%.
The agreement with the SBI & DBS was signed by the JNPT Chairman Anil Diggikar in the presence of the Shipping Secretary Rajive Kumar after the Reserve bank of India granted approval to JNPT for raising USD400 Million with an end use of on-lending to Mumbai JNPT Port Road Company Limited (MJPRCL) for implementation of road project.
The funding process involved assessment and structuring of cash-flows (both at JNPT level and MJPRCL level), bid process management, engagement of domestic and foreign lenders.
Project will be developed by Mumbai JNPT Port Road Company Limited (MJPRCL), a joint venture company of NHAI, JNPT and CIDCO at a total estimated cost of Rs. 2895 crore. Considering the importance and urgency of implementation of the project, it will be taken up by MJPRCL on EPC mode and funding for the project would be carried out by JNPT.
The rate of ECB loan of 2.025% plus Libor USD6M ( approx 3.15%) which is cheaper than any other Indian currency loan.
The funding by JNPT is the first of its kind for major port and it opens up one more avenue for major and government ports to raise funds by accessing international markets for their requirements.
The project will primarily benefit and cater to the needs of JNPT and an improved connectivity is essential for traffic evaluation from JNPT. It is of great significance to JNPT and will give a boost to the country’s economy.
This project will cater to the additional cargo which will be handled at the 4th Container Terminal. JNPT is going to double its capacity in the next seven years. This evacuation corridor would help in supporting the EXIM trade besides providing economic opportunity to the local and region.
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