Egypt a step nearer huge $7bn Tahrir petchems project

Egypt’s Carbon Holdings has secured agreement with one of the four export credit agencies expected to provide financing worth between US$4 billion and $5bn for its huge Tahrir petrochemicals project, its chief executive said.

The $7bn 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 per cent 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) could not lend new cash until its licence was renewed by Congress, according to Carbon Holdings chief exwcutive Basil El Baz.

However, the US Overseas Private Investment Corporation has now agreed to direct funding, Mr El Baz said 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,” Mr El Baz said of the full finance package.

Carbon Holdings expects three other agencies to contribute to the 17-and-a-half-year debt facility, either through direct lending or guarantees for commercial bank loans. They include 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.

Société Générale is advising on the Tahrir project, Mr El 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.

Mr El Baz was speaking last night as the company announced a $25m investment in Carbon Holdings by the International Finance Corporation.

The transaction, aimed at developing Egypt’s petrochemicals industry, could led to larger investments in Carbon Holdings and its projects, including around Tahrir, said Mouayed Makhlouf, the International Finance Corporationdirector for the Middle East and North Africa.

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