A consortium of Japanese banks have co-financed a US$1.16bn export loan deal for the construction of a chemical fertiliser production plant in Turkmenistan.

The banks included in the agreement are the Japan Bank for International Cooperation (JBIC), whose portion of the loan accounts for US$696mn, Mizuho Bank, Sumitomo and the Tokyo branch of Deutsche Bank.

Nippon Export and Investment Insurance (Nexi) will be providing insurance for the portion co-financed by private financial institutions.

The loan was signed with the government of Turkmenistan acting through the State Bank for Foreign Economic Affairs of Turkmenistan (TVEB). Turkmenistan’s state-owned petrochemical firm, Turkmenhimiya, will use the facility to construct a new chemical fertiliser production plant.

“The commissioning of the new plant is clear evidence of the successful implementation of the policy of development of the Turkmen economy through diversification and transformation of Turkmenistan into an industrialised state,” president Gurbanguly Berdimuhamedov said in a statement.

It will produce 400,000 tonnes of ammonia and 640,000 tonnes of urea by using 500 million cubic meters of natural gas per year.
Some of the plant’s equipment is expected to be purchased from Japanese firms and the majority of the chemical fertiliser plant’s products will be exported and sold primarily overseas.

A JBIC spokesperson said: “The buyer’s credit agreement will help to create business opportunities for Japanese companies in this sector in Turkmenistan.”