Lenders May halt funding over ‘Sin’ tag: ONGC Chief

Lenders may soon be reluctant to fund oil and gas projects as it is considered a ‘sin industry’ and ONGC will have to generate enough cash internally to fund its businesses, its chairman Arun Singh has said.

The rising concern about climate change has prompted some capital providers in the developed world, including banks as well as debt and equity funds, to avoid funding projects with high emissions. In India, fossil fuel projects or oil companies haven’t yet faced much funding constraints, but the fear has been growing. “You should be mindful that now if you don’t generate your own money, there is no bank money available to you after three years. Your industry is a sin industry,” Singh is learnt to have warned ONGC employees in a town hall last week. “You have to generate enough money from the existing business to fund your own business. You don’t have a choice to get outside funds.”