GAIL ties up funds for Assam petrochem project

NEW DELHI: State-run gas utility GAIL India Ltd on Thursday said it has tied up funds for a petrochemical project in Assam being set up by its subsidiary.

Brahmaputra Cracker and Polymer Ltd (BCPL), in which GAIL holds 70 per cent stake, has tied up Rs 1,756 crore debt from a consortium of seven banks led by Punjab National Bank, BCPL Chairman and GAIL India Chairman and Managing Director, Mr B C Tripathi said here.

The Rs 5,461 crore “project will be completed by April 2012,” he said.

Of the project cost, Rs 2,138 crore have been given as capital subsidy and Rs 909 crore as feedstock subsidy by the central government. Of the balance Rs 3,124 crore, the equity component is Rs 1,041 crore.

“All of the Rs 2,083-crore debt component has been tied up. Oil Industry Development Board (OIDB) has sanctioned Rs 327 crore loan and we have today signed loan agreements with a consortium of banks for the remaining Rs 1,756 crore, thereby achieving fin ancial closure of the project,'' he said.

Oil India Ltd, Numaligarh Refinery Ltd and the government of Assam hold 10 per cent stake each. The funding of this project has been envisaged with a debt-equity ratio of 2:1.

The petrochemical complex will comprise of ethylene cracker unit, downstream polymer and integrated off- site/utilities plants, he said, adding that the plant will produce 2,80,000 tonnes per annum of polymers.