Adani Total Gas Secures USD 375 Mn for Expanding City Gas Distribution Network The five international financial institutions involved in this significant transaction include BNP Paribas, DBS Bank, Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation.
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Adani Total Gas Ltd (ATGL) has secured financing of USD 375 million from a consortium of global lenders to fuel the expansion of its City Gas Distribution (CGD) network.
This marks the company's maiden international financing deal, with five major lenders participating in the funding. The initial commitment of USD 315 million comes with an accordion feature, allowing for further financial commitments to bolster ATGL's growth strategy.
The five international financial institutions involved in this significant transaction include BNP Paribas, DBS Bank, Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation.
This financial backing is expected to accelerate ATGL's capital expenditure program, enabling the company to expand its CGD network across its 34 authorised geographical areas (GAs) in India, spanning 13 states.
ATGL's strategic plan aligns with the government's mission to increase the share of natural gas in India's energy mix. The company's expansion efforts will serve up to 14 percent of India's population, covering over 200 million people. This move is aimed at deepening the penetration of Piped Natural Gas (PNG) and Compressed natural Gas (CNG) infrastructure, thereby facilitating the transition to a gas-based economy in India.
"Participation from the global lenders reinforces the potential of city gas distribution in its role as transition fuel," said Parag Parikh, CFO of ATGL.
"This financing framework will drive ATGL's sustained growth and will be a stepping stone for future financing based on its capital management plan, which will create a long-term value for all our stakeholders," added Parikh.
The company's efforts support the Indian government's goal of increasing the share of natural gas in the national energy basket from 6 percent to 15 percent by 2030. Legal counsel for the financing deal included Latham & Watkins LLP and Saraf & Partners representing the borrower, while Linklaters and Cyril Amarchand Mangaldas represented the lenders.
ATGL holds the rights to operate in 34 GAs, with an additional 19 GAs managed through a joint venture with Indian Oil Corporation Limited (IOCL) under Indian Oil-Adani Gas Private Limited (IOAGPL).
