L&T Infrastructure Finance to provide Term Loan to AG&P for the Development of City Gas Distribution Networks in South and West India
Delhi: AGP CGD India Pvt. Ltd. (AG&P CGD), a subsidiary of Singapore-based AG&P Group – the global downstream gas and LNG logistics company, has entered into an INR 518 cr Term Loan agreement (approximately, US$72.2 million) with L&T Infrastructure Finance Company Ltd. (L&T Infrastructure Finance), a subsidiary of L&T Finance Holdings. These funds will be used to develop the City Gas Distribution (CGD) networks of AG&P CGD in Jodhpur, Barmer and Jaisalmer in Rajasthan and Ramanathapuram in Tamil Nadu. AG&P CGD holds the exclusive licenses to build CGD networks to sell natural gas in these two Geographic Areas (GAs) in addition to ten other GAs across India. These networks are being developed to connect millions of people to compressed natural gas (CNG) for their vehicles and piped natural gas (PNG) for their homes and businesses.
In total, AG&P CGD secured twelve 25-year CGD licenses from the Government of India’s Petroleum & Natural Gas Regulatory Board (PNGRB) in the 9th and 10th rounds of bidding. These licenses allow AG&P CGD to supply natural gas to 12 GAs covering 28 districts in Andhra Pradesh, Karnataka, Kerala, Rajasthan and Tamil Nadu, making the company the largest foreign player in India’s rapidly developing CGD sector. AG&P CGD is building over 1,500 CNG stations, supported by 1,800 kilometers of steel pipelines which will run across the length and breadth of the geographies awarded, creating thousands of local jobs.
“We are deeply honored by the trust that L&T Infrastructure Finance has placed in AG&P CGD to deliver these critical CGD networks, which will bring clean and affordable safe fuel to households and consumers who drive as well as to transportation, industrial and commercial. In these areas, this will be the first time these people have access to natural gas,” said Mr. Abhilesh Gupta, Chief Financial Officer and Commercial Head, AG&P Group. “We are privileged to serve the millions of hard-working people in our areas and contribute to India’s accelerating infrastructure and community development with a globally proven clean energy supply.”
Mr. Raju Dodti, Chief Executive – Infrastructure Finance said, “This is our first financing transaction in the CGD sector, and we are happy to partner with AG&P. We expect these projects to aid the development of communities and businesses in these districts, triggered by the resultant reduction in energy costs, employment generation and overall positive impact of cleaner energy on the environment.”