Fis Clear Rs 400cr For Wimco Lpg Project

Wimcos project for setting up a liquefied petroleum gas (LPG) terminal in Oka in Gujarat has achieved financial closure.

The financial institutions, led by Industrial Financial Corporation of India (IFCI) have given in-principle clearance for a loan of Rs 400 crore for meeting the debt component of the project cost. Wimco is expected to bring in at least Rs 267 crore in the form of equity.

However, the financial institutions have sought a mortgage on the physical assets besides the revenue flows.

The Rs 667 crore project is to be set up on a build-own-operate-transfer (BOOT) basis and has been worked out on the basis of a 60:40 debt-equity ratio.

Sources here said that Wimco signed the concession pact with the state government earlier this month.

The detailed project report for the terminal has been prepared by Sandwell of Canada.

The project does not carry any kind of guarantees and the revenues for discharge of cargo will be entirely in foreign exchange, the sources said.

The Gujarat government and the Gujarat Maritime Board had provided a similar mortgage for the Adani port in Gujarat. Sources expect this is likely to be repeated in the case of Wimco.

The initial cost of developing the port, which included creating a 200-metre wide lagoon and capital dredging has already been carried out by the Gujarat Maritime Board.

The dredging was carried out to increase the ports draft to 12.5 metres to enable large vessels, tankers and LPG carriers to dock.

Sources said the total project cost includes the costs related to the setting up of a T-shaped jetty for discharging the cargo from the vessels, providing a 3.5 lakh tonne cryogenic storage tank and providing pipeline facilities of 3.5 kilometre length.

At present, the discharging of LPG is done only at 11 ports in the country. The deregulation of the LPG sector and its subsequent open general license list status has made this kind of venture attractive.