HPCL is to hold up to 74 % stake in the project, while the balance will be with Rajasthan Govt.

The government, on Friday, gave its approval for setting up a Rs. 37,299-crore refinery-cum-petrochemical complex by Hindustan Petroleum Corporation Limited (HPCL) in Rajasthan. HPCL will set up the greenfield project in Barmer district of Rajasthan in a joint venture with the State Government.

Information and Broadcasting Minister Manish Tewari told reporters here that the project cost was proposed to be sourced with a debt-equity ratio of 1.5:1. Total equity component is Rs. 14,892 crore, and the debt Rs. 22,338 crore.

HPCL is to hold up to 74 per cent stake in the project, while the balance will be with Rajasthan government. HPCL's equity contribution is Rs. 11,020 crore at 74 per cent equity and the Rajasthan Government's equity contribution is Rs. 3,872 crore at 26 per cent. The Rajasthan Government has also agreed to provide an interest-free loan of Rs. 3,736 crore every year for 15 years from the date of commencement of production. The loan is to be repaid by the joint venture in equal annual instalments from 16th year, after commercial production commences for the next 15 years.

HPCL will have the marketing rights, including first right of refusal in respect of uplifting and purchase of all products (including petrochemials), which would be produced by the refinery. The refinery, which is planned to go on stream in four years, will source half its crude oil needs from Cairn's Barmer oilfields, while the remainder will be imported.