Carbon Holdings to mandate banks for Tahrir in next two weeks

Carbon Holdings is expected to mandate commercial banks in the next two weeks to finance the $10.9 billion ECA/DFI-backed Tahrir Petrochemicals Corp (TPC) project in Egypt. Following a roadshow in London on 24 May, Carbon Holdings has received letters of interest equating to an almost two times oversubscription for both ECA-backed tranches.

The scheme involves a naphtha cracker that will provide the feedstock for a range of ethylene-derived products. The scheme is an export-driven project and will be built at Carbon Holdings’ EBIC site south of the Suez Canal in the Suez Industrial Development Company park in Ain Sokkna.

The scheme will be financed on a debt-to-equity ratio of 49/51 and is expected to reach financial close by the end of August or beginning of September. The $5.4 billion debt facility comprises a $400 million direct loan provided by OPIC, a $1.8 billion UKEF-backed tranche (100% guarantee), a $2.8 billion Euler Hermes-covered tranche (95% gurantee), and a $400 million EDC loan. US-Exim are also looking to provide $1.8 billion of debt if its board reaches a full quorum before financial close. Societe Generale is advising on the debt and Lazard on the equity.

Carbon Holdings will provide 51% of the $5.5 billion equity stake with zero credit pre-completion revenues from TPC (accounts for around $2 billion of net income a year) and capital from Oriental Petrochemical Corporation (Carbons’ existing polypropylene plant), Egypt General Petroleum Corporation (EGPC) will take 24% of the equity portion, and DFIs such as African Development Bank, African Finance Corporation, EBRD and CDC will put up the remaining 26%.

Carbon Holdings has signed a long-term supply-or-pay contract with energy trading company AOT to provide four million tonnes of napta per year as feedstock to the project, with EGPC providing the remaining portion.

Bechtel has been appointed as project manager on the scheme and the contractors are Technimont, Archirodon and Linde. There is no overall wrap on the construction. The construction contracts are LSTK fixed-priced contracts. EPC contractors are scheduled to begin construction in December 2018, with completion expected at the beginning of 2023.