Additional financing agreement for oil refinery signedSociety
/MONTSAME/ Today, Minister of Finance Ch.Khurelbaatar and General Manager of
Exim Bank of the Republic of India Shri Saroj Khuntia signed an agreement on additional financing of USD 236 million to be granted to an oil
refinery establishment project in Mongolia.
Within USD 1 billion credit of Export-Import Bank of India, the project on establishment of oil refinery with an annual capacity of 1.5 million tons, is being implemented in Altanshiree soum of Dornogobi aimag. With feasibility study developed by ‘Engineers India Limited’ Company, it is estimated that an investment totaling USD 1 billion and 236 million is required for the refinery establishment. Therefore, the sides agreed on additional soft loan of USD 236 million from Exim Bank of India with repayment term of 20 years and annual interest of 1.75 percent.
Mongolia imports 1.3 million tons of fuel at USD 1 billion every year. When oil price increases at world market, it adversely affects Mongolia’s economy. Establishing the oil refinery, it will become possible for Mongolia not to be affected by oil price increase at world market and to save USD 1 billion at home, Finance Minister Ch.Khurelbaatar said.
Construction works of 27 km branch line to be used for transporting equipment and devices and goods from Sainshand railway station to the oil refinery, 17 km long auto road with a heavy load carrying capacity and 110 kWt power transmission line have been completed within scheduled period and handed over to the State Commission on October 8. Construction of the refinery will commence next year and is expected to commission in 2023, mentioned Indian Minister of Petroleum and Natural Gas D.Pradhan.
“Mongolia and the Republic of India have many years of friendly ties. By helping Mongolia to build its oil refinery, it is significant to preserve bilateral friendly ties for next 100 years,’ he added.