ANCHORAGE, Alaska (AP) -- Anchorage has been awarded a $25 million federal grant to assist with upgrades to the Port of Alaska.

News organizations reported the funds will be put toward the $2 billion modernization project.

Officials say the U.S. Department of Transportation grant will fund construction of a new $214 million petroleum and cement terminal.

Mayor Ethan Berkowitz's office says state and federal funds cover $134 million of the terminal's cost, leaving an $80 million gap.

Municipal Manager Bill Falsey says the grant will help offset the deficit, while the remaining $55 million can be generated from port tariffs.

Falsey says the grant will allow the terminal project to start this summer with completion projected for 2021.

An estimated 85% of Alaska's homes and businesses rely on cargo from the port.