The US Export-Import Bank said on Tuesday that it will provide $75 million in loan guarantees for exports of US technology, equipment and services to build Indian Oil Corp's Rs 5104 crore (Rs 51.04 billion) integrated petrochemical complex at Panipat.
The agreement for the guarantee was signed by Ex-Im Bank chairman Philip Merrill, IOC chairman M S Ramachandran, and ABN AMRO Bank Group vice president of structured trade Jill Chen at a ceremony at Ex-Im Bank headquarters in Washington, the bank said in a statement.
DuPont E I de Nemours and Co of Wilmington, Delaware, and UOP LLC of Des Plaines, Illinois, are two of a number of US companies that will supply goods or services under the deal.
"Today's signing is a major step towards concluding a transaction that will benefit both of our economies and our people. It also signals a strengthening of the relationship between IOC and Ex-Im Bank," Merrill said.
ABN AMRO Bank is the arranger and guaranteed lender of the transaction.
The Panipat plant will produce petrochemicals used in manufacturing plastic containers, artificial fibres used in man-made fabrics, and various other plastic products. Project completion is scheduled for September 2005.
IOC selected UOP of USA as the technology licensor for the paraxylene unit. IOC will pay $21.57 million to UOP as technology transfer fee and all service leading to the commissioning of the plant.
Meanwhile, IOC officials said the integrated paraxylene and PTA project in Panipat has already seen a Rs 876 crore (Rs 8.76 billion) cost overrun and is now targeted for completion by September 2005.
The project, involving manufacture of 350,000 tonnes of paraxylene and 525,000 tonnes of PTA using special cut naphtha from refineries at Panipat and Mathura, was originally budgeted to cost Rs 4228 crore (Rs 42.28 billion) and was targeted for completion in August 2004.
Relocation of the plant within the Panipat refinery and integration of offsite facilities and utilities with the expansion of the refinery caused the delay, officials said.