The IFC has agreed to provide financing to support Gujarat State Petronet’s expansion of its natural gas transmission network in India. The project aims to reduce harmful environmental emissions, while reducing the cost of energy for private and commercial users by replacing more expensive imported fuels.
The financing package features a loan of Rs3.375bn and equity of up to US$30mn.
Petronet is India’s second-largest natural gas transmission firm, and the only one that transports gas on behalf of third-party shippers. Its transmission network already covers 1,080km, and there are plans to expand this by another 800km over the next three years.
“We welcome IFC’s support, which will help make us a strong player in gas transmission in western India. Our company will continue its vision to provide cleaner and more efficient fuel to the power, fertiliser, and other industrial sectors, as well as to transport and domestic users in Gujarat,” says D. Rajagopalan, Indian administrative service, chairman of Gujarat State Petronet.
The Asian Development Bank and KfW have also signed financing agreements to fund the expansion of Petronet’s LNG receiving terminal in Dahej in Gujarat.
India has significant financing needs in its infrastructure sector, with an estimated US$350bn worth of investment required over the next five years.