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JSW Steel to raise a major chunk of ₹15,000 crore funding for 5 mtpa Vijaynagar expansion at a concessional rate from countries where it is importing the machineries.
“Overseas fundraising is out of the question right now because rates are so high. We are exploring ECA credits which are offered at OECD (Organisation for Economic Co-operation and Development) consensus rates. This credit is offered by export credit agencies for imports from those particular countries,” Seshagiri Rao, Joint Managing Director, JSW Steel told businessline.
JSW Steel has placed orders for machinery with German companies, so an export credit agency from Germany will finance the order, he added.
This credit is available for buying goods and services. About 85 per cent of the value of the order placed with that country can be funded through this route, he said.
OECD determines the rates based on the average rate prevailing in different countries so that it becomes much cheaper, he added.
In January, JSW Steel announced plans to enhance capacity at its Vijayanagar plant from 13 million tonnes (mt) per annum to 18 mtpa by FY24.
The company has received environmental clearance for the project from the Ministry of Environment, and preliminary clearance from the ‘Single Window High-Level Clearance Committee’, Karnataka.
The new brownfield expansion will be spread across 600 acres and includes establishing a 4.5 MTPA Blast Furnace, two Steel Melt Shops 350 tonnes each and 5 mtpa Hot Strip Mill along with other allied and auxiliary facilities. JSW Steel, as part of its next phase of growth, is targeting an overall capacity of 37.5 mtpa in India and USA by FY25.
It recently doubled capacity at its Dolvi plant in Maharashtra to 10 mtpa and ramping up of production at the newly commissioned is going on. The company could have operated the expanded capacity at 100 per cent utilisation in the September quarter but operated at 80 per cent due to iron ore shortage, said Rao.
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