Now that the Odisha government has agreed to restore part of its tax incentives, Indian Oil Corp (IOC) will invest around Rs 52,000 crore to expand its Paradip refinery and set up a petrochemical complex.

The state government has agreed to give interest-free loan of around Rs 700 crore per annum for 15 years to make up for the withdrawn incentive of 11 years.

IOC will go ahead with the expansion of the Paradip refinery with a capacity of five million tonne a year. Along with this, it will also set up a polypropylene plant and a monoethylene glycol production facility in four to five years.

IOC and the Odisha government will sign an addendum for the original tax incentive agreement of 2004.

As per the revised agreement, the viability gap funding for the Paradip refinery project will be revised to Rs 700 crore per annum, to be payable in four equal installments in each quarter, in the form of interest-free loan for 15 years, starting from the financial year 2016-17.

The Odisha government will provide interest-free loan to IOC for 2016-17 and three quarters of the current year, by December 2017 or January 2018 and every quarter thereafter.