RIL raises $550 mn from Japanese banks

Reliance Industries Limited on Wednesday said it has raised $550 million loan for part-funding expansion of its petrochemical plant and new gasification unit from Japanese banks.

"In continuation of the fund raising programme initiated in 2012-13, RIL has tied up Export Credit Agency facility of up to $550 million co-financed by JBIC (Japan International Bank for Cooperation) and a group of other Japanese banks backed by NEXI," the company said.

The 12-year loan will part finance the proposed expansion of RIL's petrochemical plants and setting up of new gasification unit and refinery off-gas cracker over the next 2-3 years.

"This is RIL's eighth ECA facility for the largest capital expenditure programme it has undertaken," it said.

This is the first time that JBIC is extending credit to RIL.

JBIC will provide direct financing of up to $330 million and Japanese banks, supported by a 95 per cent Nippon Export and Investment Insurance insurance cover, will finance up to $220 million.

The participating banks include The Bank of Tokyo-Mitsubishi, Sumitomo Mitsui Banking Corporation, Mizuho Bank, and three regional Japanese banks namely The Gunma Bank, The Hachijuni Bank, and The Chiba Bank.

The facility will have a door-to-door tenor of twelve years and will be used to finance contracts for imports of goods and services signed with more than 20 Japanese suppliers.