Essar Energy borrows $300 million from Export-Import Bank of China

This loan was in addition to the existing $150 mn loan facility from Axis Bank

London Stock Exchange-listed Essar Energy, a unit of India’s Essar group, has borrowed $300 million from the Export-Import Bank of China.

The loan is an addition to the existing $150-million loan facility from Axis Bank Ltd, said Essar Energy in a press statement. The agreement with Axis Bank allowed Essar Energy to increase the borrowing to $450 million. These loans will have to be paid back by 2017.

The latest loan will be used to repay an outstanding amount of $233 million under an existing bridge loan facility and for general corporate purposes.

“The upsizing of the existing Axis facility following Exim Bank’s agreement to lend a further $300 million marks a further milestone in our programme to strengthen our balance sheet and improve liquidity within Essar Energy,” Essar Energy’s chief financial officer Deepak Maheshwari said.

“We continue to make good progress with our refinancing activities across our power and oil and gas businesses to lower risk, lower costs and extend repayment maturity time frames,” he added.

In April this year, Reliance Power had received funds to the tune of  Rs 2,550 crore ($470 million) from the US and Chinese Banks to finance its 4,000-MW power project at Sasan in Madhya Pradesh. The project is being built at an estimated cost of  Rs 23,000 crore.

The Sasan plant has an overall commitment of over  Rs 10,000 crore from the US Exim, Chinese and other overseas banks. The funds are for the import of equipment for the coal mines and power project.