L&T Infrastructure Finance to provide Rs 518 cr loan to AG&P for city gas projects

L&T Infrastructure Finance Co Ltd will provide Rs 518 crore term loan to Singapore-based gas major AG&P Group's Indian arm for developing city gas networks in Rajasthan and Tamil Nadu.

AG&P is the largest foreign player in the city gas distribution business after it won licenses to retail compressed natural gas to automobiles and piped cooking gas to households in 12 cities in Andhra Pradesh, Karnataka, Kerala, Rajasthan and Tamil Nadu.

"AGP CGD India Pvt Ltd (AG&P CGD), a subsidiary of Singapore-based AG&P Group - the global downstream gas and LNG logistics company, has entered into a Rs 518 cr term loan agreement with L&T Infrastructure Finance Company Ltd, a subsidiary of L&T Finance Holdings," a company statement said.

These funds will be used to develop the city gas distribution (CGD) networks of AG&P CGD in Jodhpur, Barmer and Jaisalmer in Rajasthan and Ramanathapuram in Tamil Nadu.

"These networks are being developed to connect millions of people to compressed natural gas (CNG) for their vehicles and piped natural gas (PNG) for their homes and businesses," it said.

In total, AG&P CGD secured twelve 25-year CGD licenses in the ninth and tenth rounds of bidding in the last couple of years.

"These licenses allow AG&P CGD to supply natural gas to 12 GAs covering 28 districts in Andhra Pradesh, Karnataka, Kerala, Rajasthan and Tamil Nadu, making the company the largest foreign player in India's rapidly developing CGD sector," it said.

AG&P CGD is building over 1,500 CNG stations, supported by 1,800 kilometers of steel pipelines which will run across the length and breadth of the geographies awarded.

"We are deeply honoured by the trust that L&T Infrastructure Finance has placed in AG&P CGD to deliver these critical CGD networks, which will bring clean and affordable safe fuel to households and consumers who drive as well as to transportation, industrial and commercial. In these areas, this will be the first time these people have access to natural gas," AG&P Group Chief Financial Officer and Commercial Head Abhilesh Gupta said.

L&T Infrastructure Finance Chief Executive Raju Dodti said, "This is our first financing transaction in the CGD sector, and we are happy to partner with AG&P. We expect these projects to aid the development of communities and businesses in these districts, triggered by the resultant reduction in energy costs, employment generation and overall positive impact of cleaner energy on the environment."