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Adani Group Receives 14,500 Cr. from SBI-Led Consortium for Mundra PVC Project

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Mundra Petrochem Ltd., an Adani Group company, will receive funding of Rs. 14,500 crore from State Bank of India (SBI)-led consortium for its coal-to-Polyvinyl Chloride (PVC) project. This project will come up at an estimated cost of Rs. 34,000 crore in Gujarat’s Mundra Special Economic Zone (SEZ).

Private Lenders to Finance Remaining Project Cost

Apart from funds that will be lent by the SBI-led consortium, Mundra Petrochem will finance the balance project development cost from private lenders.

As per an article published by Mint on 20th July 2023, Adani Group is expected to get financial closure for this project by the middle of August.

Mundra Petrochem’s PVC Facility to be Developed in Two Phases

Mundra Petrochem’s upcoming facility will be developed in two phases. The first phase is expected to be complete by 2025-26 and will entail the development of 1 Million Metric Tonnes Per Annum (MMTPA) PVC manufacturing capacity.

This capacity will be doubled to 2 MMTPA in phase 2 of the project, which will be developed after the completion of phase 1.

Adani’s Mundra Complex to Reduce India’s PVC Import

As per Adani Enterprises’ Annual Report for FY-23, annual PVC demand in India sits at around 3.5 Million Metric Tonne (MMT), whereas India’s current PVC production capacity is approximately 1.5 MMTPA. This supply-demand imbalance results in annual PVC imports of about 2 MMT. “The proposed 2 MMT per annum plant is expected to address the underserved market in India”, states Adani Group’s Annual Report.

Adani’s Coal-to-PVC Plant to Minimize Carbon Dioxide Emissions

In a separate media release, the company clarified that using Coal to produce PVC is less polluting as compared to producing PVC from petroleum. Producing PVC from crude oil involves hydrocarbon cracking, which leads to significant Carbon dioxide emissions. Sourcing Carbon from Coal for PVC production minimizes the release of Carbon dioxide.

Brief Background of Adani’s Mundra PVC Project

Mundra Petrochem Ltd. was incorporated in April 2021 for setting up the aforementioned PVC manufacturing facility. Thereafter, in a media release dated 20th March 2023, Adani Enterprises stated that in light of pending financial closure, equipment procurement and site construction activities pertaining to this project had been put on hold.

Following this, an article published by Mint dated 6th June 2023 stated that Mundra Petrochem had received in-principle approval from a group of domestic banks for a credit line of about Rs. 14,000 crore and that Adani was therefore, poised to revive the Mundra PVC project.

About Mundra Petrochem Limited: Ahmedabad-headquartered Mundra Petrochem is a wholly-owned subsidiary of Adani Enterprises and it was incorporated in April 2021.