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SG Corporate & Investment Banking has arranged a US$382mn financing guaranteed by US Ex-Im Bank and Export Development Canada (EDC) to support exports of equipment and engineering services to be used in the construction of the 825MW Skikda Power Project in the Algerian coastal city of Skikda.

SNC-Lavalin Inc, the leading Canadian engineering firm, is the EPC contractor, also acting through SNC Lavalin Constructors Inc, its US-based subsidiary. The borrower is Shariket Kahraba Skikda (SKS), a special purpose corporation formed to develop the project. SKS is owned by three companies, two state-owned energy companies, Sonatrach and Sonelgaz and the Algerian Energy Company (AEC). During the construction phase of the project, the share capital of SKS will be opened up for private investors, and SNC-Lavalin intends to invest in the project at that time. Once construction is finished, SNC-Lavalin will operate and maintain the plant for twelve years. SG CIB acted as sole arranger, sole lender for the two ECAs tranches, and sole swap agent on the deal. This is the largest export finance transaction set up in Algeria to date. Furthermore, this is a major project for the Algerian economy.