Abu Dhabi's ADEX signs $6mln deal with Jenaan to finance Egypt project

The projects will not just lead to growth and expansion of the two Emirati companies, but they will also bolster Egypt's food security

  
A truck drives in front of factory chimneys on the outskirts of Cairo, Egypt October 30, 2018.

A truck drives in front of factory chimneys on the outskirts of Cairo, Egypt October 30, 2018.

REUTERS/Mohamed Abd El Ghany

Abu Dhabi Exports Office (ADEX), the export-financing arm of Abu Dhabi Fund for Development (ADFD), signed a 22 million UAE dirham ($6 million) loan agreement with the Egypt-based Emirati firm Jenaan Pipes & Irrigation Systems SAE.

The funds will enable the company to import raw material from Borouge, an Abu-Dhabi-based polyolefins company, to manufacture and supply irrigation systems to one of the world’s largest refineries situated in Egypt, ADEX said in a statement Wednesday.

The projects will not just lead to growth and expansion of the two Emirati companies, but they will also bolster Egypt’s food security, ADEX said.

The polyethylene extrusion plant provides Jenaan with a new strategic manufacturing foothold in Egypt to expand across the MENA region, while greatly reducing shipping and logistics costs. The irrigation system will support a new beet farm and the refinery that will produce 900,000 tonnes of sugar annually, reducing Egypt’s reliance on sugar imports by 80 per cent.

The amount will be used to fund Borouge’s export of high-density polyethylene for the new Jenaan irrigation system, which will cover a 76,000-hectare reclamation and cultivation project on desert land.

Saeed Al Dhaheri, Acting Director General of ADEX, said that the financing agreement would help Borouge to further expand its business, apart from enabling JPIS, the newly established UAE company in Egypt, to meet its working capital requirement.

“Such a model of export financing by ADEX will benefit many more UAE companies and their overseas customers in the future,” he added.

ADEX provides direct financing and guarantees to overseas buyers from the public and private sectors seeking to import goods and services from UAE companies. Its funding and guarantees are designed to support national businesses across the UAE in all non-crude oil sectors.

(Writing by Brinda Darasha; editing by Daniel Luiz )

brinda.darasha@refinitiv.com 

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here. 

© ZAWYA 2021

More From Construction