MUMBAI: The country’s largest container handling port Jawaharlal Nehru Port Trust has signed an agreement to raise a dollar-denominated loan of $400 million, or about Rs 2,660 crore, at close to a tenth of prevailing domestic borrowing rates.This is the first dollar-denominated loan for JNPT that is also known as Nhava Sheva “The agreement was signed last night. The loan is raised at 2.36% rate compared to 12% which is the prevailing domestic rate,” shipping minister Nitin Gadkari told ET at the ongoing Maritime India Summit here on Friday.“This was my brainchild. ICICI Bank was lending at 12%. I said why? Raise dollar loans. Now viability of the project won't be a problem,” the minister said.Industry experts said this will lead to other major ports also taking the external commercial borrowing (ECB) route as this would work out cheaper despite the fact that the rupee has been falling against US dollar.“This is a proof of concept which can be implemented by the ministry of shipping in six other major ports with surplus dollar revenues towards raising cheaper financing in dollar terms,” said Vinod Bahety, senior president for corporate finance at Yes Bank.JNPT deputy chairman Neeraj Bansal said the port will raise $300 million from State Bank of India and the rest from DBS Bank. “DBS and SBI had both come up with very attractive rates with a few decimal points worth of difference. So we gave the mandate to both,” he told ET.JNPT handled 4.49 million TEUs (twenty foot equivalent units) of container cargo in 2015-16 and aims to scale this up to 10 million TEUs by 2020-21.The port earned total revenues of Rs 1,600 crore, including dollar revenue worth Rs 250 crore, in the just-ended financial year, said Bansal.A person familiar with the development said JNPT's dollar receivables or revenues have been pegged as collateral against the loan.The port will use the debt funds for enhancing roadways connecting to the port, which have in the last few years become increasingly clogged due to growing traffic. This has in turn led to massive congestion problems forcing shippers to divert cargo to ports in Gujarat JNPT plans to invest about Rs 3,500 crore in expanding the four lane highway to six lanes, Bansal said. This will be the major chunk of its capital expenditure worth Rs 5,000- 7000 crore for the next couple of years. The rest of the capex will go into modernising equipment and developing other modes of cargo transport, he said.Work on the highway will start soon and will likely take two years to complete, said Bansal.JNPT currently earns vessel charges from international shippers in dollar terms, but the payments are made in rupees and pegged to the prevalent dollar rate. It’s a practice followed since 1991.For collateral or loan repayments, JNPT needs to be paid in dollars and that's an approval the port has sought from the government.