The public sector oil refiner, Indian Oil Corporation (IOC) has arranged more than Rs 10,000 crore debt for its 15 million tons Paradip refinery that is likely to service from the first quarter of 2012.

An official from the IOC informed that so far they have tied up funds for more than Rs 10,000 crore from a group of PSU banks and further they have mandated SBI a limit of Rs 14,700 crore debt to be arranged for the project.

The bank has however committed to lend Rs 4,200 crore for the project. It the maximum amount any bank is extending as a loan. The other lenders that will provide funds for the project include Bank of Baroda, Bank of India, Canara Bank and State Bank of Hyderabad.

"We are targeting to close the financing by next month, the official said. Even if we don't get commitments for the remaining amount, we will close the syndication and proceed with the project. The remaining amount may be tied-up as the project progresses," said the official.

The oil refiner is going finance this Rs 29,777 crore project in the debt-equity ratio of 1.5:1, he added.

Last year IOC board had split the refinery cum petrochemical complex into two. They decided to first work on refinery and later on the chemical unit.

He further informed that Paradip refinery will have a Nelson Complexity Index of 15 and will be constructed to process the toughest, heaviest and the dirtiest crudes.

Basically higher is the index, more capable a unit is to process tough high sulphur and waxy crudes.

Recently Reliance Petroleum has also commissioned the only-for-exports refinery at Jamnagar, which has a Nelson complexity of 14.