This landmark transaction will support Bharat Petroleum Corporation Limited’s (BPCL) expansion in Bina, Madhya Pradesh
- Saraf and Partners acted as the lender’s legal counsel to a consortium of 6 (six) banks consisting of-
- State Bank of India
- Bank of India
- Punjab National Bank
- Canara Bank
- Exim Bank
- Union Bank of India
(“Lenders”).
- In relation to a rupee term loan with certain sub-limits such as letter of credit, capex letter(s) of credit (inland/foreign)/standby letters of credit/buyer’s credit for an aggregate amount of INR 31,802,00,00,000 (Indian Rupees Thirty-One Thousand Eight Hundred Two Crores) (“Facility”)
- It will be availed/to be availed by Bharat Petroleum Corporation Limited (Maharatna company under the control of Government of India) (“Borrower”) for the purposes of part financing the construction and implementation of a petrochemical complex which will produce downstream polymers/products like Linear Low Density Polyethylene (LLDPE), High Density Polyethylene (HDPE), Polypropylene (PP), Benzene, Toluene, Mixed Xylene etc., along with brownfield expansion of the Borrower’s refinery capacity at Bina, Madhya Pradesh from 7.8 (seven point eight) MMTPA to 11 (eleven) MMTPA, to primarily cater to the feed requirements of petrochemical plants (“Project”).
- The total cost of the Project is INR 48,926,00,00,000 (Indian Rupees Forty-Eight Thousand Nine Hundred Twenty-Six Crores) (collectively “Transaction”).
About the Project
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A 1.2 million tonnes/year ethylene cracker unit
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Production facilities for linear low-density polyethylene (LLDPE), high density PE (HDPE), polypropylene (PP), bitumen, and benzene.
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Increased capacity for gasoline, diesel, and aviation turbine fuel production.
The financing structure includes various sub-limits, such as letters of credit and capital expenditure-related credit facilities, both domestic and foreign. Saraf and Partners played a pivotal role in drafting, reviewing, negotiating, and finalizing the financing and security documents, ensuring compliance with regulatory requirements, especially considering BPCL’s need for approvals from the Government of India for its operations.
As of now, there are no publicly reported litigations related to Bharat Petroleum Corporation Limited’s (BPCL) Bina refinery expansion and petrochemical project. The project has achieved financial closure with a ₹31,802 crore loan agreement signed with a consortium of six lenders led by the State Bank of India.
The foundation stone for this project was laid on September 15, 2023, and it is currently in the development phase. No legal disputes or challenges have been reported in connection with this transaction so far.
Given the scale of the Bina project, obtaining environmental clearance is a critical step before proceeding with construction. However, specific details regarding the current status of this clearance are not publicly disclosed at this time.
Saraf & Partners
Saraf and Partners (S&P) acted for Lenders on all aspects of the transaction, including drafting, reviewing, negotiating and finalising of the financing documents and the relevant security documents and it also played a pivotal role in providing strategic advice for consummation of the Transaction. In addition to the above, the team was instrumental in conceptualising positions in the financing documents that would operationally and logistically be possible for the Borrower to comply with, given that the Borrower requires Government of India’s approvals for its conduct and operation.
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References
1. Business Standard (2025, January 17) BPCL ties Rs 31,802 cr funds for Bina refinery expansion, petchem project business-standard.com
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