India’s state-owned Power Finance Corporation (PFC) has approved INR91.87bn ($1.11bn) financing to support HPCL Rajasthan Refinery’s new refinery-cum-petrochemical complex.

HPCL Rajasthan Refinery (HRRL) is building a green field refinery-cum-petrochemical complex in Barmer district, Rajasthan, with an estimated project cost of INR729.37bn ($8.82bn).

This is the first project where PFC has extended its financial assistance to the refinery and petrochemical sector.

Earlier this week, HRRL executed a loan agreement under a consortium arrangement for INR486.25bn, in which PFC’s share was INR91.87bn.

HRRL is a joint venture (JV) between Hindustan Petroleum Corporation (HPCL), which holds a 76% stake, and the Rajasthan government owns the remaining 26% stake.

The project includes an energy-efficient and environment-friendly refinery-cum petrochemical complex and a pipeline for transportation of both Rajasthan Crude and imported crude.

It also includes a pipeline for the transportation of water to the refinery site, a captive power plant for supplying power and steam to the refinery, crude and product storage facilities, township and associated facilities and utilities.

The project will be used to manufacture clean fuels such as BS-VI grade motor spirit (MS) or petrol and BS-VI grade high-speed diesel (HSD) and petrochemical products.

The products include polypropylene, butadiene, LLDPE, HDPE, benzene, and toluene.

It is expected to address the increased demand for petroleum and petrochemical products in the country and the western, northern, and central parts of India.

The PFC financing will support the development of the HPCL Rajasthan Refinery Project, which contributes to the country’s efforts in the refinery and petrochemical sector.