Raj Refinery

REC, a Central Government owned financial institution, has provided a loan of Rs 4,785 crores to HPCL Rajasthan Refinery (HRRL) for the development of a greenfield refinery and petrochemical complex in Rajasthan’s Barmer district. This loan is part of a larger consortium arrangement amounting to Rs 48,625 crores, in which REC’s share is Rs 4,785 crores.

HRRL’s ambitious project aims to establish a refinery with a capacity of 9 million metric Tonnes per annum (mmtpa) and carries a total project cost of Rs 72,937 crores. The scope of the project goes beyond the refinery and petrochemical complex, encompassing the construction of pipelines for transporting both Rajasthan Crude and imported crude, a water transportation pipeline, a captive power plant, storage facilities for crude and products, as well as a township and associated utilities.

HRRL, a joint venture between Hindustan Petroleum Corporation Limited (HPCL) and the Government of Rajasthan, was formed on 18 September 2013. HPCL holds 74 percent equity stake in HRRL, while the remaining 26 percent is owned by the Government of Rajasthan.

The primary goal of the project is to produce clean fuels such as BS-VI grade Motor Spirit (Petrol) and BS-VI grade High-Speed Diesel (Diesel), along with various petrochemical products. This initiative will address the growing demand for petroleum and petrochemical products in India, particularly in the Western, Northern, and Central regions.

REC, a Maharatna CPSU under the Ministry of Power, is a leading non-banking financial company specialising in power sector financing and development across India. With over fifty years of operational experience since its establishment in 1969, REC provides financial assistance to state electricity boards, state governments, power utilities, independent power producers, rural electric cooperatives, and private sector utilities. Its financing activities cover various types of projects in the power sector, including generation, transmission, distribution, and renewable energy.

In addition to its involvement in the refinery project, REC is planning to raise approximately $1 billion through term loans to support infrastructure projects. The fundraising will be done in two tranches, with the first tranche of $505 million expected to conclude this month, and the second tranche of $520 million to be raised in August. This strategic move aligns with Prime Minister Narendra Modi’s emphasis on infrastructure development as a cornerstone of the nation’s progress. The loan proceeds will be utilized for financing power, infrastructure, and logistics projects, and several leading lenders, including Axis Bank Ltd., Bank of Baroda, Bank of India, HSBC Holdings Plc, and State Bank of India, are participating in this endeavour.

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