Aug 10 2010 |
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Egyptian firm seeks financing for refinery
Tuesday, Aug 10, 2010
Gulf News
Five banks will raise funds for Cairo plant
Dubai The Egyptian Refining Company ( ERC ) has signed up with five institutions to raise $2.35 billion (Dh8.63 billion) in senior debt to finance construction of its $3.7 billion second-stage oil refinery in the greater Cairo area.
In addition to the senior debt package, which has been subscribed by Japan Bank for International Cooperation, Nippon Export and Investment Insurance, the Export-Import Bank of Korea, the European Investment Bank and the African Development Bank, the company has raised subordinated debt of $225 million from Mitsui and Company, which is part of the consortium of contractors building the refinery, and AfDB.
“We are delighted to announce the debt package for what we believe stands as one of the largest project finance deals ever assembled in Africa,” said Citadel Capital Managing Director Marwan Al Araby.
Enhance economy
“ ERC has won outstanding backing from leading global institutions because it will have a notable effect on both Egypt’s economy and on the environment, particularly in the Greater Cairo Area. It has similarly enjoyed the full backing and support of the Government of Egypt and, in particular, of the Ministry of Petroleum,” Al Araby said.
News of the debt package came just weeks after the International Finance Corporation announced it would invest equity of $100 million in the project.
The refinery, to be located in the greater Cairo district of Mostorod, will sell its production to EGPC under a 25-year offtake agreement at international prices.
“That this project remained on track through the deepest financial crisis in living memory is a testament to ERC’s solid econ-omic fundamentals,” said Citadel Capital Managing Director Ahmad Al Hussiany.
“Iron-clad fundamentals and strong support from both legislators and regulators are exactly what financial institutions look for when considering which projects to back.”
Tom Thomason, Chief Executive Officer of ERC , said: “Considering the operational, financial and regulatory complexity of building a refinery today, the signing of ERC’s debt package has come together remarkably quickly.
ERC will improve the environment of greater Cairo by annually preventing approximately 93,000 tonnes of sulfur from being released into the atmosphere. It will also invest in improvements to CORC’s environmental performance, particularly the emission of greenhouse gases.”
ERC has obtained all regulatory and environmental approval and signed a lump-sum turnkey contract with GS Engineering and Construction/Mitsui and Co.
$2.35b
amoung ERC will raise in senior debt
$3.7b
cost of second-stage refinery in Cairo
$225m
amount ERC has raised from Mitsui and Co
oil
We are delighted to announce the debt package for what...stands as one of the largest project finance deals ever assembled in Africa.”
Marwan Al Araby
Managing director, Citadel Capital
Gulf News Report
© Gulf News 2010. All rights reserved.
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