Last Updated April 30, 2008
An €1.1bn-equivalent financing for the construction of a nitrogen-based fertiliser plant in northwest Algeria has closed, with documents signed in mid-April. The project sponsor is Sorfert Algeria, a 51/49 joint venture between Egypt's Orascom Construction Industries (OCI) and Sonatrach, the national oil and gas company of Algeria. The plant is set to be one of the largest fertiliser exporters to the Mediterranean. It will begin commissioning its first production in the second half of 2010.
The facility has been raised in Algerian dinar and was arranged by agent bank Banque Exterieure d'Algerie. Also participating in the deal were Banque Nationale d 'Algerie, CNEP Banque, Banque de Developpement Local and Credit Populaire d 'Algerie. It carries a tenor of 15 years, including a grace period of approximately three years covering the construction period.
The plant is being built in the industrial zone of Arzew near several major Algerian ports on the Mediterranean Sea, and will comprise of an ammonia and granulated urea plant with a capacity of up to 1.2mn tonnes per year.
Law firm White & Case provided legal counsel to Sorfert regarding the engineering, procurement and construction (EPC) contract that it entered into with Germany’s Uhde, a urea production technology company, and OCI Algeria, OCI’s wholly-owned construction subsidiary.
Commenting on the deal, White & Case partner Paule Biensan, remarks: "We are seeing increasing levels of industrial investment in North Africa. These countries have abundant resources and given their coastal locations, are in a good position to export manufactured goods. These factors, combined with the region's sustained strong economic growth, make these countries attractive prospects for investors.”
Nassef Sawiris, OCI chief executive officer adds: "we are extremely proud of the progress we have achieved together with Sonatrach in this landmark Algerian project. With global demand for fertilisers on the rise, we hope to play an important role in international trade.”
The importance of the Middle East and North Africa region in the global urea export market is rapidly growing, with the region becoming a key supplier to China.
Egypt is one of the main drivers of growth in the region, followed closely by Algeria. Around five fertiliser plants will be coming into operation in Egypt between 2006 and 2010, while Algeria has at least two plants in the pipeline.
Reader Comments