A $341 million facility to Sonker, an Egyptian company providing hydrocarbon storage and bunkering, will support a significant upgrade of the country’s oil and gas infrastructure and will contribute to the energy security of Egypt.
The International Finance Corporation (IFC), a member of the World Bank Group, is providing a $70 million senior loan along with a $22 million mezzanine loan and mobilising $52.5 million from other investors. In addition, the Commercial International Bank (CIB) of Egypt, the country’s largest private-sector bank, will commit $28 million and the equivalent of $44 million in Egyptian local currency (£E) as well as a $30 million Credit Support Instrument Facility. As part of the consortium, the European Bank for Reconstruction & Development (EBRD) is extending a $72 million senior loan and a $22 million mezzanine loan to the company.
Sonker operates oil and gas storage and bunkering facilities at the Ain Sokhna Port on the Red Sea. Installing the necessary infrastructure is crucial for energy security in Egypt as it will increase storage and handling capacity for imports of gasoil, liquefied petroleum gas (LPG) and liquefied natural gas (LNG).
The company will use the funds to construct and operate a bulk-liquids terminal for the import and storage of gasoil, LPG in the third basin of Ain Sokhna Port. The new infrastructure will accommodate the docking of two floating storage and regasification units and the handling of LNG imports to the nearest national gas grid.
The loan will also support Sonker in adopting the highest standards of corporate governance and business conduct through the implementation of an environmental and social action plan and the upgrading of safety standards to prevent any oil contamination.
“The Egyptian government is taking quantum leaps towards achieving a more resilient and sustainable economy. Foreseeing the growing local demand for energy, the Egyptian authorities, supported us in developing this first bulk-liquids terminal on the Red Sea, as a successful public-private partnership project,” said Ossama Al Sharif, Sonker’s Managing Director. Al Sharif added: “The Sonker Project will ensure a constant supply of energy to our burgeoning economy and will certainly transform the Red Sea area into a regional hub for trading petroleum products, not only for the Egyptian market, but also for East Africa and Europe.”
“IFC’s financing will help create vital energy infrastructure for Egypt at a time when the demand for power is growing,” said Nada Shousha, IFC Country Manager for Egypt. “Our aim is to spur job creation and minimise infrastructure gaps by increasing private sector participation in the economy. We also hope to send a positive market signal to international and domestic private sector investors.”
Heba Abdellatif, Head of Debt Capital Markets at CIB, said: “CIB is committed to supporting Egypt’s liquid-storage capacity for petroleum products and views this project as being of strategic importance to ensure continuity of supply and minimise the cost of imported products. We believe that the cooperation between IFC, their partner financial institutions, the EBRD and ourselves present a template for project financing, given the large foreign currency funding requirements, and signals a positive outlook for the Egyptian economy.”