Adani secures Rs 175 cr IDFC loan

The Adani group, which has bagged the licence for distribution of compressed natural gas (CNG) and piped natural gas (PNG) in Ahmedabad and Vadodara, has achieved financial closure for these projects.

Industrial Development Finance Corporation (IDFC) has sanctioned a Rs 174.50-crore loan to Gujarat Adani Energy Ltd (GAEL), the Adani group company that will implement the gas distribution in the two cities.

IDFC has sanctioned a term loan of Rs 27.50 crore for the Vadodara project and another term loan of Rs 147 crore for the Ahmedabad project. Company officials say this is an indicator of the confidence financial institutions have in the project.

The Ahmedabad and Vadodara gas distribution projects are expected to be set up at a combined cost of Rs 400 crore. So far, GECL has spent around Rs 30 crore on the projects and expects to spend another Rs 100 crore this fiscal year.

"While we will purchase gas from Gujarat State Petroleum Corporation (GSPC) for Ahmedabad city, it will be better to purchase gas from GAIL for Vadodara," said Sanjay Gupta, CEO (Infrastructure) of the Adani group.

GAEL will supply gas to industries, commercial outfits, domestic users (through a pipeline network) and vehicles through a CNG station network. The total demand for gas in Ahmedabad and Vadodara is estimated to be 2.0 million metric standard cubic metres per day (mmscmd).

The company is also working on developing its network in Santej, Changodar and Sanand industrial areas - all located on the outskirts of Ahmedabad city. It also plans to set up a network in the Padra-Jambusar and Karjan areas apart from its planned area of operation at Alembic, Savli and Makarpura (located around Vadodara city). It has started laying pipelines in Ahmedabad and Vadodara for the projects.

While the Nandesari project is planned to be commissioned by the end of this month, the Ahmedabad project is scheduled to be commissioned by June end. GAEL has signed gas sales and gas transportation agreements for these projects.