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The European Bank for Reconstruction and Development (EBRD) is providing US$28 million to Advanced Energy Systems SAE (ADES), an independent Egyptian oil services company, in order to support a company which applies the best environmental, health and safety (EHS) standards in the local oil and gas industry and to address the shortage of drilling equipment in the country.
The loan will be complemented by a comprehensive policy dialogue programme to promote the adoption of these standards across the wider oil and gas sector in Egypt.
Egypt suffers frequent shortages of the natural gas that supplies the country’s power plants. The introduction of offshore drilling equipment will help foster the development of domestic natural gas production, thereby reinforcing the country’s energy security. This will be done while improving the standards of local oil and gas exploration and production, leading to higher efficiency and a reduced impact on the environment.
The EBRD package of a targeted loan and policy dialogue will address these issues. The loan will help ADES improve compliance with the highest EHS standards through certification to international ISO and OHSAS standards. In addition, a corporate governance action plan will be implemented, thereby setting standards for business conduct in the industry.
Technical cooperation funds will be mobilised to assist the Egyptian authorities in bringing national EHS regulation up to internationally recognised standards and supporting capacity-building within Egyptian state companies.
Riccardo Puliti, EBRD Managing Director, Energy and National Resources, said: “We are very proud to sign this package with ADES today. The combination of financing and policy dialogue will allow us to improve people’s lives in Egypt by minimising energy shortages and raising environmental standards.”
Dr Mohamed Farouk, CEO of ADES said: “It is a great opportunity for ADES to expand its financial partnership with a global financial institution like the EBRD through this transaction. The ADES expansion plans will unlock production in offshore fields to address the energy crisis in Egypt. The enhancement within ADES of EHS processes and corporate governance will be central to these plans and will have a positive impact on the market performance and competitiveness of ADES.”
Ayman Abbas, co-founder of ADES said: “It was a great experience to work with EBRD’s natural resource team on our first transaction with the Bank, and definitely a milestone for ADES to expand its financing possibilities in the international financial market. This will boost the competitive advantage of the private sector oil services companies in the energy sector in Egypt among the multinational and governmental services companies.”
Since the beginning of the EBRD’s operations in Egypt in 2012, it has committed over €742 million to 23 projects across a wide range of sectors. The Bank has also facilitated direct technical assistance through its Small Business Support programme, which to date has benefited approximately 185 Egyptian small and medium-sized enterprises.
Advanced Energy Systems SAE (ADES) is an independent oil services company incorporated in Egypt and controlled by the Egyptian Abbas family, which operates a fleet of offshore drilling rigs and equipment in the country.