Algeria’s national hydrocarbon company Sonatrach has signed eight multisource framework agreements for funding, estimated to €3.2bn, with eight European banks. These agreements, which cover the period between 2003 to 2007, are designed for the funding of goods and European originating departments. These fundings, which were negotiated at the rate of Libor (rate applied to the financial market of London) more than 0.5%, comes in the shape of engagement of these banks to tender for the funding of transactions or projects of Sonatrach group in accordance with the procedure of invitation to tender. The agreements have been signed with BNP Paribas, Natexis Banque Populaires, Fortis Bank and HSBC for an amount of €500mn each; with Cr édit Lyonnais for €350mn; Credit Agricole Indosuez for €250mn; and Arab Bank AG (Germany) for €100mn.
Coface, Belgium’s OND and Hermes are providing political risk cover.
Talks are apparently underway with other European and US banks to establish new framework accords for funding with other Algerian corporates.