Essar Energy takes out US$1 billion loan

Enters into agreement with China Development Bank and PetroChina.

Essar Energy Plc and its refining subsidiary, Essar Oil, have entered into a memorandum of understanding with both Chinese firms that will enable it to raise over US$1 billion of funds as external commercial borrowings.

The Indian group will enter into a long term product offtake agreement with PetroChina that is linked to the loan. The deal means Essar will receive an advance for the petroleum products it exports to China via PetroChina. Chinese financing will make the deal the first of its kind for Essar.