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L&T Infra Finance lends ₹518 cr. for gas distribution

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Enters into pact with AG&P Group arm

L&T Infrastructure Finance, a subsidiary of L&T Finance Holdings, has entered into an agreement with AG&P India Pvt. Ltd., a subsidiary of Singapore-based downstream gas and logistics firm AG&P Group, to provide term loan of ₹518 crore for development of city gas distribution (CGD) networks in South and West India.

“These funds will be used to develop CGD networks of AG&P CGD in Jodhpur, Barmer and Jaisalmer in Rajasthan and Ramanathapuram in Tamil Nadu,” the company said in a statement.

AG&P CGD holds the exclusive licenses to build CGD networks to sell natural gas in these two areas in addition to 10 other areas across India. These networks are being developed to connect millions of people to compressed natural gas (CNG) for their vehicles and piped natural gas (PNG) for their homes and businesses.

In total, AG&P CGD secured twelve 25-year CGD licenses from the Government of India’s Petroleum & Natural Gas Regulatory Board (PNGRB) in the ninth and tenth rounds of bidding. These licences allow AG&P CGD to supply natural gas to 12 areas covering 28 districts in Andhra Pradesh, Karnataka, Kerala, Rajasthan and Tamil Nadu, making the company the largest foreign player in India’s rapidly developing CGD sector.

AG&P CGD is building over 1,500 CNG stations, supported by at least 1,800 km of steel pipelines which will run across the length and breadth of the geographies awarded, creating thousands of local jobs.

“These critical CGD networks will bring clean and affordable safe fuel to households and consumers who drive as well as to transportation, industrial and commercial. In these areas, this will be the first time these people have access to natural gas,” Abhilesh Gupta, Chief Financial Officer and Commercial Head, AG&P Group, said.

Raju Dodti, chief executive, L&T Infrastructure Finance, said, “This is our first financing transaction in the CGD sector and we expect these projects to aid the development of communities and businesses in these districts, triggered by the resultant reduction in energy costs, employment generation and overall positive impact of cleaner energy on the environment.”

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Printable version | Jan 26, 2020 9:02:44 AM | https://www.thehindu.com/business/lt-infra-finance-lends-518-cr-for-gas-distribution/article30516796.ece

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