Cabinet approves Rs 1257.82 crore interest-free loan to revive 3 fertiliser units

NEW DELHI: The Union cabinet chaired by Prime Minister Narendra Modi today approved a proposal to grant Interest Free Loan (IFL) worth Rs 1,258 crore for three fertilizer projects of Hindustan Urvarak and Rasayan Limited (HURL).nnModi has approved the proposal of Department of Fertilizers to grant Interest Free Loan (IFL) equivalent to the interest during construction (IDC) component of Rs.422.28 crore, 415.77 crore and 419.77 crore for Gorakhpur, Sindri and Barauni projects respectively to Hindustan Urvarak and Rasayan Limited (HURL) fertilizer projects.nnThe IFL shall be disbursed in first three years during construction. The repayment shall be spread over a period of 11 years with a moratorium period of three years of disbursement period during construction and the repayment phased over the next eight years.nnBackground:nnHindustan Urvarak and Rasayan Limited, a Joint Venture company of National Thermal Power Corporation, Indian Oil Company Limited, Coal India Limited and Fertilizer Corporation of India Limited / Hindustan Fertilizer Corporation Limited was incorporated in June 2016 to implement the fertilizer revival projects at Gorakhpur, Sindri and Barauni. Interest free loan would result in savings in the Project Cost expenditure and improvement in the project IRR and viability ratios, particularly the minimum debt service coverage ratio.