Numaligarh refinery to raise $90 mn through ECB

Assam-based Numaligarh Refinery Limited (NRL), a subsidiary of Bharat Petroleum Corporation Ltd (BPCL), will be raising $90 million through External Commercial Borrowing (ECB) to finance some of its capital projects. This will be NRL's biggest financing deal since commissioning of the refinery in the year 2000.

The company on Saturday signed an agreement with State Bank of India (SBI) to raise the money. The company has for the first time accessed the route of dollar denominated financing in a big way through ECB. According to a company statement, ECB source has been tapped by NRL "as it is the most efficient and convenient mode of financing since it is dollar denominated and therefore the cost of borrowing will be much lower for NRL". SBI underwrote ECB at a competitive bidding and loan will be syndicated by the banks London Branch.

The agreement was signed at the NRL's registered office in Guwahati by Nilmoni Bhkta, director (finance) of NRL and PK Mohanty, assistant general manager of SBI, in the presence of other senior officials from NRL and SBI.

NRL will be utilizing this borrowing primarily to part finance its ongoing Wax Project at its refinery complex in Numaligarh in Golaghat district in central Assam. Estimated cost of the Wax Project is estimated to be around Rs 577 crore with foreign exchange component of Rs. 80 crore. The plant is scheduled to be commissioned within the current financial year.

"Moreover, this project funding experience shall be handy when NRL embarks upon its ambitious project of refinery expansion from the current 3 MMTPA to 8/9 MMTPA , which is actively being pursued," the company statement added.