Landmark investment led by Citadel Capital, top Egyptian, Gulf and international investors, global export credit agencies and development finance institutions will reduce present-day diesel import needs by 50%, improve air quality in the Greater Cairo Area, help reduce Egypt’s annual subsidy bill, result in more than $300 million in additional direct benefits to the state annually, and spur job creation
The Egyptian Refining Company (ERC) has achieved financial close on a $3.7 billion package to construct a green-field petroleum refining upgrade project in the Greater Cairo Area. The ERC project is a public-private partnership with the private sector investing alongside the government to address a critical national requirement for infrastructure.
Developed by Citadel Capital (CCAP.CA on the Egyptian Exchange), the leading private equity firm in the Middle East and Africa with $9.5 billion in investments under control, ERC is an import substitution project to address Egypt’s growing demand for products such as diesel that are currently imported in rising quantities.
The state-of-the-art facility will produce over 4.1 million tons of refined products and high-quality oil derivatives per year, including more than 2.3 million tons of Euro V Diesel (the cleanest-burning diesel fuel in the world). ERC will enable Egypt to reduce its current level of diesel imports by approximately 50%.
“ERC is more than one of Africa’s largest-ever project finance deals, it is also a transformative development for the Egyptian economy. The financial close of ERC confirms to international investors and the global community that Egypt is open for business. The signal this sends is huge,” Citadel Capital Founder and Chairman Ahmed Heika, said.
“ERC is a key component of Egypt’s energy security going forward.”
ERC will deliver diesel and other high-value products to the Egyptian General Petroleum Corporation (EGPC) at the heart of the consumption market in the Greater Cairo Area.
“We would like to thank everyone who has made this project possible, from our equity investors to the providers of ERC’s debt facilities, from the Government of Egypt to the people of Mostorod, where the refinery will be located,” Heikal, said.
Financing for the project includes US$ 2.6 billion in debt and a further $1.1 billion in equity.