(Adds details of loan agreement in fourth paragraph.)

Feb. 2 (Bloomberg) -- Reliance Industries Ltd., owner of the world’s largest refining complex, has been granted a $400 million equivalent loan to expand production in India, according to SACE SpA, an Italian export-credit agency.

The loan will be guaranteed by SACE, according to an e-mail from the agency in response to questions from Bloomberg.

Billionaire Mukesh Ambani’s company, which last month reported its first quarterly drop in profits, is facing a decline in global demand for oil products as economic growth slows. Lower refining margins are hurting producers in China and India which plan to raise refining capacity to a record this year.

SACE’s guarantee will support contracts for the supply of goods and services to Italian companies, SACE said in the e-mail today, without naming any companies. This deal is the fourth concluded with Reliance since 2004 and brings to $1 billion the total credit facilities backed by SACE for the Mumbai-based company.

SACE and Reliance will sign the loan agreement at SACE’s headquarters in Rome today, according to the e-mail.

Reliance will use the loan proceeds to expand and upgrade the production capacity of its petrochemical plants, a gasification plant and refinery off-gas cracker as part of an investment plan in India worth more than $11 billion, according to the e-mail.

-- Editors: Katrina Nicholas, Mohammed Hadi

To contact the reporter on this story: Ruth David in Mumbai at rdavid9@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net