Massive Energy Deal: ₹10,287 Crore Secured for India's Refinery Expansion! Find Out Which Banks Are Funding This Game-Changer!

State Bank of India and a group of eleven other prominent lenders have collectively sanctioned financial assistance amounting to ₹10,287 crore (approximately $1.24 billion) to Numaligarh Refinery Limited (NRL).

Key Financials

• Total funding sanctioned: ₹10,287 crore
• Approximate USD value: $1.24 billion
• Lead lender: State Bank of India
• Participating banks include Bank of India, Bank of Maharashtra, Punjab National Bank, Central Bank of India, Union Bank of India, HDFC Bank Limited, Axis Bank Limited, ICICI Bank Limited, Indian Overseas Bank, UCO Bank, and EXIM Bank.

Project Scope

The significant financial package is designated for several strategic development projects at Numaligarh Refinery:

• Expansion of the refinery's capacity from its current 3 Million Metric Tonnes Per Annum (MMTPA) to 9 MMTPA.
• Development of a substantial crude oil pipeline spanning approximately 1,635 kilometers from Paradip Port.
• Establishment of associated crude oil import terminal facilities at Paradip Port.
• Construction of a 360 KTPA (Kilo Tonnes Per Annum) polypropylene unit at the Numaligarh site in Assam.

Government Vision

This ambitious project is integral to the Government of India's "Hydrocarbon Vision 2030 for the North-East." The vision's core objectives are to strengthen India's energy security and drive inclusive economic growth across the North-Eastern region.

Company Background

Numaligarh Refinery Limited (NRL) is a Navratna, Category-I Miniratna CPSE (Central Public Sector Enterprise) operating under the administrative control of the Ministry of Petroleum and Natural Gas, Government of India. Its establishment was based on the provisions of the historic Assam Accord.

Legal Counsel

Vritti Law Partners provided legal counsel to the lead lender, State Bank of India, and the consortium of banks throughout this major financing deal. The transaction team was led by Debashree Dutta, Partner, supported by Aishwarya Pandey (Senior Associate), and Associates Kanika Jain and Priyanka Chandgude.

Impact

• This substantial funding will significantly enhance India's domestic refining capacity, playing a crucial role in bolstering the nation's energy security and reducing reliance on imports.
• The development of new infrastructure, including the pipeline and polypropylene unit, is expected to generate employment opportunities and stimulate economic development in Assam and the broader North-East region.
• The increased capacity and diversified product portfolio will strengthen Numaligarh Refinery Limited's operational capabilities and market position.
• The participation of a large consortium of major banks underscores strong confidence in NRL's expansion plans and the strategic importance of the project.
• Impact Rating: 9

Difficult Terms Explained

• Consortium: A group of banks or financial institutions that come together to finance a large project.
• Financial Assistance: Funds provided by lenders to a borrower, typically in the form of loans, for specific purposes.
• MMTPA: Million Metric Tonnes Per Annum. This unit measures the processing capacity of refineries or industrial plants on an annual basis.
• Crude Oil Pipeline: A large conduit system designed to transport crude oil from extraction points or import terminals to refineries or storage facilities.
• KTPA: Kilo Tonnes Per Annum. A unit of measurement for industrial production capacity, representing thousands of metric tons per year.
• Navratna: A special status awarded to select large Public Sector Undertakings (PSUs) in India, granting them enhanced financial and operational autonomy.
• Miniratna: A status given to smaller Public Sector Undertakings (PSUs) in India, empowering them with certain financial powers. Category-I refers to specific PSU types.
• CPSE: Central Public Sector Enterprise. A government-owned corporation involved in various economic sectors.
• Hydrocarbon Vision 2030 for the North-East: A government policy initiative aimed at boosting the oil and gas sector in India's North-Eastern region, focusing on energy security and economic development.