Power Finance Corporation offers to underwrite entire debt of Rs27,300 crore for the planned Vadhavan Port, the biggest debt financing for a port project

If the deal is finalised, it will prove to be the biggest debt financing for a port project in the country

R RJha, Director (Projects) and his team from the Power Finance Corporation met UnmeshWagh, Deputy Chairman and Chairman in Charge of Jawaharlal Nehru Port Authority to discuss financing for the port project.Power Finance Corporation, a Maharatna PSU,  a Non-Banking Finance Company (NBFC) is classified as an infrastructure finance company by the Reserve Bank of India.

State-owned Jawaharlal Nehru Port Authority (JNPA), which is helming the construction of Vadhavan Port has hired IDBI Capital Markets and Securities Ltd as transaction advisor to raise funds for the project. The new port  now waiting for Cabinet clearance 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 MMB would be in line with their respective shares, according to the financial structure finalised in consultation with lenders.

JNPA had previously said it will explore multiple options for raising long-term debt, including rupee term loans from banks and financial institutions, Non-Convertible Debentures (NCD’s) and External Commercial Borrowings (ECB’s) with the aim of optimally matching the project’s cash flows with the most advantageous financial arrangement.