J N Port hires IDBI Capital Markets as transaction advisor to raise debt for mega Vadhavan port

JNPA Chairman Sanjay Sethi has said that the port authority and IDBI Capital Markets and Securities Ltd have held preliminary discussions with potential funding agencies such as financial institutions, banks, and multilateral organizations to arrange funds for the project.“Lenders have shown strong interest in the project,” Sethi said, noting that the initial funding for the project will come from the equity contributions of the port promoters.

The debt will be raised in phases subject to finalisation of project structuring and timeline of revenue generation on the back of award of concessions to private firms for running cargo terminals.

The project is currently awaiting environmental and coastal regulation zone clearances and investment approval from the Union government. These are expected by March-April.

The new port will be developed by Vadhvan Port Project Ltd, a joint venture between JNPA (74 percent stake) and Maharashtra Maritime Board (26 percent equity), in two phases under the landlord model, per the government policy, with an investment of Rs76,220 crore.The new port will be funded on a debt-equity ratio of 70:30 backed by corporate guarantees from JNPA and Maharashtra Maritime Board (MMB). The equity contributions of JNPA and

For securing environmental clearance for the new port, a public hearing was held on 21 December at Daman. The public hearing at Daman was held by a Committee of the Pollution Control Board which was attended by various stakeholders including fishermen. The concerns expressed by the stakeholders were addressed during the public hearing, which went smoothly, a JNPA official said.

The plan to set up a port at Vadhavan has been opposed by locals, farmers, and fishermen.To dilute the opposition, JNPA has decided to shift the location of the new port to 5-6 kms inside the sea from the previous onshore site.The new offshore site for building Vadhavan Port falls within the domain of the Central government and beyond the area of Dahanu Taluka.On 31 July, the Dahanu Taluka Environment Protection Authority (DTEPA), granted a no objection certificate to J N Port Authority to develop Vadhavan Port subject to various terms and conditions imposed by the Ministry of Environment, Forest and Climate Change (MoEF&CC) and its authorities.

By choosing to relocate the project site to offshore from onshore, JNPA has managed to dilute opposition from local farmers and fishermen against the project, improve the viability and operational efficiency of the planned port and reduce logistics costs.“The government’s policy managers have taken the project to such a level that nobody (political parties) can now think of reversing it,” said a source involved in the project.

The construction of a new port at Vadhavan is key to the expansion plans of JNPA given the limitations on expansion at Nhava Sheva (where J N Port is located).