A triangular Memorandum of Understanding (MoU) was signed on Wednesday by the union government, a bank consortium, and Adani Ports Pvt Ltd, the company that oversees the Vizhinjam deep-sea port, to provide the project with Viability Gap Funding (VGF) of Rs 817.80 crore. In addition, an MOU was inked by the Kerala government and the Center, which states that the state will provide the union government 20% of the money it receives from the port.

At an estimated cost of Rs 8,867 crore, the deep-water port was built by Adani Ports and Special Economic Zone Ltd (APSEZ), the largest port developer in India and a member of the Adani Group, using a public-private partnership model.

The Kerala government has chosen to take the VGF as a loan from the Union government, according to state Minister for Ports V N Vasavan, who spoke at the event. He said that the state agreed to accept it as a loan after several pleas to the Centre to provide it as a grant did not yield a result.

V N Vasavan said the Vizhinjam International Seaport Ltd (VISL) is the biggest development dream of the state and the government did not want any delay in completion of the project.

The central government’s share of Rs 817.80 crore as VGF for the port project was accepted at a cabinet meeting last Thursday that was taken over by Kerala Chief Minister Pinarayi Vijayan.

The federal government has mandated that the state reimburse the money using the Net Present Value (NPV) methodology, according to a statement released by the Chief Minister’s Office following the Cabinet meeting.