JSPL raises Rs 3,500 crore to fund Odisha steel project

Unfazed by its failure in Bolivia where it has threatened to walk out of a large steel project due to differences with the Bolivian government, Naveen Jindal-led Jindal Steel & Power has raised Rs 3,500 crore from a consortium of lenders for a steel project it is setting up in Odisha.
The steelmaker will use the loan for a 2-million-tonne, coal-to-gas direct reduced iron (DRI) plant near Angul, Odisha.
"It's a viable project and the banks are satisfied as it is the first of its kind in the world," Finance Director Sushil Maroo told ET. "The project is based on the two resources abundant in India (noncoking coal and iron ore) and will have lower costs compared to traditional plants." The average cost of borrowing is about 11 per cent. The debt will add to Jindal Steel's consolidated debt of Rs 14,716.8 crore as on March 31, 2012.
Jindal Steel Bolivia is in the process of terminating a $2.1-billion investment contract - the largest foreign investment in the Latin American country - after the country reneged on contractual obligations with regard to gas supplies. The company was also building a similar size DRI plant, tapping Bolivia's vast iron ore and coal reserves. Odisha project's funding also signals the return of banks to participate in large-scale metals and mining projects after an economic slowdown and weak industrial policy made such projects unviable.