SBI to raise Rs. 4,000 cr for BPCL's petrochemical plan.

State-run Bharat Petroleum Corporation Ltd. (BPCL) is planning to raise Rs. 4,000 crore for the expansion of its Kochi refinery and to fund its petrochemicals venture, said three banking sources aware of the development. State Bank of India (SBI) has received the mandate to raise funds.

BPCL is planning to diversify into downstream petrochemicals with an investment of Rs. 4,588 crore by using propylene. The public sector refiner is planning to produce niche petrochemicals such as acrylic acid, acrylates and oxo alcohols, which are predominantly being imported into the country, at its Kochi refinery facility, using the polymer grade propylene that will be available after the ongoing integrated refinery expansion project (IREP) is completed.

'The board of directors of BPCL has given their approval for diversification into petrochemicals at an estimated capital cost of Rs. 4,588 crore,' BPCL had said this month.

'We will be financing the project through both internal accruals and external financing,' said a senior BPCL official.

The company will invest around Rs. 14,225 crore in its expansion at the Kochi refinery and Rs. 5,000 crore for setting up a petrochemical joint venture.

BS