The Egyptian Refining Company (ERC) has finalised a US$2.6bn debt package for the construction of its second-stage oil refinery in the Greater Cairo area.
A host of export credit agencies and development banks are involved in the US$2.35bn senior debt package, including the 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 (AfDB).
The majority of the debt has a 17-year tenor, with a few loans maturing in 15 years.
The remaining financing is split between a US$25 subordinated loan from AfDB and US$200mn of subordinated debt financing from Mitsui and Co., which is part of the consortium of contractors building the refinery.
“This project has been in development for about five years, and when the global financial crisis occurred the commercial banks were unwilling to lend to anybody, so we had to restructure the parts of the deal which was geared towards commercial banks. So it was after the global financial crisis that we had to contact JBIC and AfDB,” Tom Thomason, chief executive officer of ERC, tells GTR.
“It’s a pretty incredible project and it deserves to be built,” Thomason adds.
Marwan Elaraby, managing director of one of ERC’s parent companies, Citadel Capital, remarks: “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. 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.”
The state-of-the-art refinery, with its total price tag of US$3.7bn, will produce four million tonnes of refined oil products a year once it is completed in 2015.
Last Updated August 16, 2010
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