State-owned gas utility GAIL India Ltd said on Tuesday that it has secured a $100 million (Rs 500 crore) loan from Bank of Tokyo-Mitsubishi UFJ to part-finance its pipeline expansion plans.
The loan agreement signed is the first in the series of three tie-ups that GAIL plans to enter into for a total of $300 million (Rs 1,500 crore) in external commercial borrowings (ECB). The debt would help GAIL fund ongoing expansion plans and new projects of $9 billion (Rs 45,000 crore).
“The loan agreement was signed between GAIL India director (finance) P K Jain and Bank of Tokyo general manager Naoki Isetani,” the company said in a press statement.
The term of the loan is five years and comes close on the heels of an earlier term loan of $150 million taken by GAIL from Bank of Tokyo in June, 2011. GAIL is presently implementing projects to lay 5,500 km of pipelines at an estimated cost of Rs 25,000 crore ($5 billion). The company is also doubling the capacity of its petrochemicals plant at Pata, in Uttar Pradesh, from 446,000 tonnes per annum to 900,000 tonnes by 2014.