Essar Oilآ’s Vadinar refinery project not eligible for OIDB loan
Essar Oil clearly didnt do its homework before approaching the oil ministry-sponsored Oil Industry Development Board for a loan.
Early last month, Essar Oil wrote to oil minister Ram Naik repeating its request for a Rs1, 334cr ($277m) OIDB loan for its Vadinar refinery, which is under construction. To complete the refinery project, we have approached the OIDB for sanction of a loan, Naik was told.
The OIDB is a forum meant to finance oil projects for the development of the petroleum industry in India. Essars request will be turned down because, funding a private refinery project does not fall within the OIDBs scope of work.
We are also told the OIDB is only permitted to give low interest loans for state-owned or joint venture projects in which the government-owned company has at least 26% stake. OIDB loans for such joint ventures require a guarantee from the state-owned partner.