Although the economic and security situation in the North East region of India has vastly improved in the recent past, Indian banks are still cautious lending to projects in the region. HDFC Bank, the lead arranger, was struggling with syndication of the project debt. GuarantCo’s guarantee enabled the additional financing required for the project to achieve financial close.

The amount required was above GuarantCo’s normal maximum exposure so INR 480 million of the total INR 1,120 million was syndicated by GuarantCo to Cordiant Capital, a Montreal based emerging market fund manager, thus leveraging in further private sector support.

The project will create the largest cement production facility in the North East region of India which suffers from an on-going cement production deficit. It will help bring down the abnormally high cement prices in the region by reducing the substantial cost of freight that suppliers currently bear for cement brought in from mainland India.

It is also the largest single private sector infrastructure investment in the North East. Besides providing employment and increasing economic activity in the troubled region, the project will support other infrastructure projects such as housing, roads and hydropower thereby multiplying the developmental benefit.