Idbi Okays Essar Oil Project

The board of the Industrial Development Bank of India today cleared the proposal for resumption of work on Essar Oil's 10.5 million tonne refinery project.

Work on the Essar Oil project in Gujarat had come to a standstill after the earthquake in January this year. The company, which has completed, 64 per cent of the work on the refinery, expects to complete the remaining work within 18-24 months.

The Rs 8,000 crore mega project is being funded through Rs 2,148 crore of equity and a debt portion of Rs 5,852 crore.

ABB would also provide deferred credit of $43 million and bridge financing of $48 million. ABB, along with Larsen & Toubro, has given a completion guarantee.

The total investment that has gone into the project till date is Rs 6,300 crore, including that on the terminal. All the major plants and machinery valued at $420 million have arrived at the site and another $200 million worth of equipment is ready for shipment.

Once the project gets completed, Essar Oil is looking at foraying into oil retailing by setting up 1,700 outlets. The company has claimed that it received response from some 5,000 aspiring franchisees.

The company has also submitted an expression of interest for the government's 33.58 per cent stake in the standalone oil marketing company IBP.