Reliance Jio Infocomm has successfully raised close to $2 billion in offshore loans, making it one of the largest such loans in the country in recent times. The funds will be primarily used to finance the purchase of 5G network equipment from Nokia.
The loan, arranged by HSBC, includes a cover provided by the Finnish export credit agency, Finnvera. This cover will insure both Nokia and Jio’s global lenders against any potential risks. Additionally, it is expected to reduce the overall funding costs for Jio’s 5G equipment, as lenders and suppliers feel more secure when such large deals are backed by a credit agency.
The deal with HSBC was concluded recently after months of negotiations. While the exact loan amount is estimated to be between $1.5-2 billion, the interest rate will be determined based on the tenure of the loan.
This is not the first offshore loan for Reliance Jio. The company recently secured a similar loan worth nearly $2 billion from BNP Paribas to finance its 5G network gear purchases from Ericsson, a Swedish telecommunications company. The Swedish export credit agency, EKN, provided a cover of $2.2 billion for the Jio-Ericsson 5G deal.