Vizhinjam International Seaport Limited (VISL), a special purpose vehicle (SPV) set up to implement the Vizhinjam deep water multipurpose seaport on a public–private partnership (PPP) basis, on Thursday inked a loan agreement with the National Bank for Agriculture and Rural Development (NABARD) for availing ₹2,100 crore for Vizhinjam International Seaport Phase 1 project under NABARD Infrastructure Development Assistance (NIDA) scheme.
The loan carries 8.40% interest per annum with loan tenure of 15 years, including 2 years moratorium for principal repayment. The loan amount will majorly be used to meet financial commitments including, stage payments to concessionaire for breakwater construction, equity support, land acquisition for port and rail connectivity, and for meeting the preliminary funding of underground rail connectivity project, said a statement.
With this, the State government could meet all the financial obligations it had committed for the first phase of the project. For the remaining phases, funding will be arranged by the concessionaire as per the concession agreement. This is the largest loan transaction availed by a Kerala public sector unit (PSU) with any financial institution.
Earlier, the State government had provided a guarantee to take a loan of ₹3,600 crore from Housing and Urban Development Corporation (HUDCO) as part of the phase one construction, and pledged budgetary support for the loan. However, the State dropped the proposal when it received a loan proposal from NABARD.
The State has to issue a fresh guarantee and pledge budgetary support for NABRAD loan after cancelling the guarantee and budgetary support pledged for HUDCO. A Cabinet meeting held in the first week of August authorised the managing director of VISL to sign the loan agreements. VISL Managing Director Divya S. Iyer and NABARD chief general manager Baiju Kuruppu inked the agreement at VISL office in Thiruvananthapuram on Thursday.
