Kerala and Centre Sign Rs 8.17 Bn Loan MoU for Vizhinjam Port

11 Apr 2025 CW Team

The Union government, a bank consortium, and Adani Ports, which manages the Vizhinjam deep-sea port, signed a tripartite Memorandum of Understanding (MoU) to provide Viability Gap Funding (VGF) of Rs 8.17 billion for the project. Additionally, the Centre and the Kerala government entered into an agreement under which the state will share 20 per cent of its revenue from the port with the Union government.

The Vizhinjam deep-water port, developed under a public-private partnership by Adani Ports and Special Economic Zone (APSEZ), is being constructed at an estimated cost of Rs 88.67 billion. APSEZ is India’s largest port developer and part of the Adani Group.

The Kerala government has accepted the VGF as a loan from the Centre after earlier appeals to treat it as a grant were declined. A state cabinet meeting, chaired by Chief Minister Pinarayi Vijayan, approved this decision. The Centre has stipulated that the loan be repaid under the Net Present Value (NPV) model, despite the state’s request to waive repayment conditions.

Previously, the state government had drawn comparisons with the Outer Harbour Container project at Tuticorin Port, which received grant-based funding without repayment obligations. However, the Union government maintained that the Vizhinjam project could not be equated with the Tuticorin initiative.

The Vizhinjam International Seaport (VISL) has completed the first phase of construction, and over 250 cargo vessels have already docked at the port, handling more than 6 lakh Twenty-foot Equivalent Units (TEUs). The port received its commercial commissioning certificate on December 4, 2023, following the successful completion of its trial run. Road and rail connectivity works are on-going and are expected to be completed by 2028.

News source: The Print

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