Egypt’s Carbon Holdings has first backing for $5 bln petrochemical funding
Egypt’s Carbon Holdings has secured agreement with one of the four export credit agencies expected to provide financing worth between $4 billion and $5 billion for its massive Tahrir petrochemicals project, its chief executive said on Monday.
The $7 billion scheme at Ain Sokhna at the southern end of the Suez Canal will be one of the largest petrochemicals projects in Egypt. It is projected to increase by about 50 percent the amount of such products made by the North African country in the first 10 years after becoming operational.
The financing was expected to close by the end of 2015 and be provided by five agencies, but talks were put on hold because the Export-Import Bank of the United States (US EXIM) couldn’t lend new cash until its licence was renewed by Congress, according to Carbon Holdings CEO Basil El-Baz.
However, the US Overseas Private Investment Corporation has now agreed to direct funding, Baz told Reuters in Dubai without stating for how much the agreement was worth.
“We are optimistic that we should be in a position to wrap this up this year,” Baz said of the full finance package.
Carbon Holdings expects three other agencies to contribute to the 17-and-ahalf-year debt facility, either through direct lending or guarantees for commercial bank loans. They are US EXIM, Sace of Italy and UK Export Finance.
The start of Tahrir’s construction has also been delayed from the timetable given last year. Baz said that work is now expected to begin at “the back end of this year” and last for about 48 months.
Societe Generale is advising on the Tahrir project, Baz said.
Other petrochemical projects with links to the main scheme have progressed much further. A polypropylene plant had been online since September and a $570 million ammonium nitrate facility is expected to be fully operational in July.
The chief executive was speaking as the company announced a $25 million investment in Carbon Holdings by the International Finance Corporation.