Reliance Jio has reportedly raised close to $2 billion in one of the country’s biggest offshore loans in the fiscal year 2023-24 (FY24). HSBC was the lead arranger of the initiative that will help fund recent 5G network gear purchases from Finland’s Nokia.
Earlier, Jio lined up a near-$2 billion offshore loan lead-arranged by BNP Paribas, which was also used to fund 5G network gear purchases from Sweden-based Ericsson. In turn, the Swedish export credit agency, EKN issued a $2.2 billion guarantee for the Jio-Ericsson 5G deal.
According to industry sources, potential guarantees from Finnvera to de-risk the Jio-Nokia 5G deal is vital, given Jio’s large offshore loan along with the fact that monetisation of 5G mobile broadband services is at least a year away in the absence of a devices ecosystem and relevant use-cases. The added prospect of more rupee depreciation versus the US dollar could increase Jio’s foreign debt repayment burden in the future.