The Hindu Business Line : IOC looks to finalise funding options for Paradip refinery

“We are focused on commissioning the refinery by 2012. The idea is to let the ball start rolling before the loan finances start coming, so that the project can be completed on time.”

Pratim Ranjan Bose

Kolkata, Aug. 13 IndianOil hopes to finalise the funding options, including loan and equity component, for the proposed Rs 30,000-crore Paradip refinery and secure final board approval for the project in September.

The financial closure of the project, however, is unlikely to be achieved before October. IOC has appointed SBI Caps for tying-up finances for the proposed grassroots refinery.

“In view of the recent firming up of interest rates, we are in discussion with SBI Caps on the cost of borrowings and related issues. While the financial closure is expected in October, we are expecting to ready the term sheet, finalising the loan and equity components in the project, in a month and approach the board for final approval tentatively in September,” a company source said.

Underlining IOC’s aim to commission the refinery by 2012, the source said that the company wants to start work for project commissioning based on equity funding soon after receipt of the board approval.

“We are focused on commissioning the refinery by 2012. The idea is to let the ball start rolling before the loan finances start coming, so that the project can be completed on time,” he added.

Technology identified

The company has identified the technologies to be used in the refinery and floated tenders for appointing the project management contractor based on initial board approval.

It may be mentioned that in view of increase in the project costs during last two years, IOC has shifted from its original plan to set up an integrated refining-cum-petro chemicals complex at Paradip.

According to the previous estimate, IOC had planned to set up an integrated refining and petrochemical complex at a total investment of Rs 25,000 crore.