Gangavaram Port gets Rs 1,170cr funding

Gangavaram Port (GPL), promoted by D.V.S. Raju, has received funding of Rs 1,170 crore from a consortium of 13 banks led by State Bank of India (SBI) for phase I development of the greenfield, all-weather deep water multipurpose port in Gangavaram near Vishakapatnam in Andhra Pradesh.

The deal has been structured by SBI Capital Markets as the sole financial advisor and arranger to GPL for the transaction. 

According to a release issued by SBI Capital Markets today, the transaction is unique and the first of its kind in the country as it is the largest transaction yet in India of a merchant greenfield port financing on a non-recourse basis at a leveraging of 69:31.

Gangavaram Port will be developed in three phases over the next 15-20 years with a cargo handling capacity of over 100 MTPA.  The phase I development comprises five berths and associated infrastructure for handling iron ore, coal and other bulk and general cargo and will be operational by the end of 2007.

GPL will repay the loans at 9% per annum interest in 14 years.

D.V.S. Raju, chairman and managing director of GPL, said: "The key to develop such a greenfield with the help of modern infrastructure and private money lies in making the business model bankable by effectively de-risking it."