Cairn Energy gets 150 mn dollars loan from IFC
Bangalore, July 3 (UNI) The International Finance Corporation (IFC) has sanctioned a loan of US Dollars 150 million to Cairn Energy PLC to help alleviate energy shortage in India and Bangladesh and partner in innovative community development programmes in one of India's economically under-developed States.
IFC's nine-year term loan and social and environmental due diligence have given a group of international commercial banks assurance to provide US Dollars 850 million in additional five-year term funding. The total US Dollar one billion loan would finance UK-based Cairn's capital expenditure programme, primarily the development of its recent discoveries in Rajasthan, according to a Cairn release here today.
As part of the project design, IFC and Cairn would help small, local firms to provide support services like food, transportation, security, ground keeping and others to oil and gas operations. They would also work with farmers in developing cooperative dairy ventures to improve production, the release said.
IFC's Associate Director for Oil, Gas, Mining and Chemicals Somit Varma said ''IFC's partnership with Cairn goes beyond the sizeable financing we are providing. We are working with them on extending their leadership on environmental best practices and social development. Ensuring that local communities benefit is both key for development and critical for the long-term success of extractive industry projects.'' With a target peak production of around 150,000 barrels per day, the Rajasthan development would equal around 25 per cent of India's current oil production and about eight per cent of its current oil imports, the release said.
''Support for private sector investments in oil and gas is key to IFC's strategy in South Asia. With our investment, we are supporting the local economy and helping to satisfy India's demand for domestically produced fuel,'' IFC's Director for South Asia Iyad Malas said.
A central component of the Cairn-IFC development programme was the setting up of an Enterprise Centre, which would help to provide information and expertise on business practices to local, small and medium-sized firms, putting them in a position to become potential suppliers and service providers to oil and gas operation and other ventures.
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