US$200 million loan for investments in energy efficiency and refurbishment.
- US$200 million loan for energy efficiency and modernisation of SOPC refinery
- Investment will improve plant’s operational performance and carbon footprint
- Strong growth in domestic demand for oil and gas in Egypt
Supporting the modernisation of Egypt’s oil industry, the EBRD is providing a US$200 million for major investments in energy efficiency and refurbishment of the oil refinery owned by Suez Oil Processing Company (SOPC).
The plant has a throughput capacity of three million tonnes each year or 68,000 barrels of oil per day (BOPD) and is located at the entrance of the Suez Canal, adjacent to the city of Suez. It plays a crucial role in servicing the local market where a developing economy, a growing population and an ageing infrastructure are putting pressure on meeting ever-rising demand.
The EBRD funds will finance investments to modernise the refinery with technical updates which will improve its operational performance. The investments will increase the flexibility of the plant’s crude intake and allow for the production of higher quality fuels and lower sulphur fuels.
The refinery will also undergo an extensive energy efficiency programme, leading to a direct reduction of over 295,000 tonnes of carbon dioxide equivalent (CO2e) each year and estimated yearly savings of 300,000 MWh of energy and 384,000 m3 of water.
The Suez Refinery is operated and owned by SOPC, a fully-owned subsidiary of the Egyptian General Petroleum Corporation (EGPC), an economic state corporation.
Since it started operations in Egypt in 2012, the EBRD has been supporting the country’s oil and gas sector to reduce levels of greenhouse gas emissions and air pollution, help with the implementation of international best practices and standards, increase the competitiveness of the sector and contribute to energy security in Egypt.
Despite having the largest refining capacity on the African continent, Egypt’s downstream infrastructure is ageing and the country currently has to resort to imports in order to meet its growing domestic demand for petroleum products. Upgrades and energy efficiency investments at its refineries are critical for Egypt to optimise utilisation rates, improve operational performance, reduce environmental impacts and achieve a sustainable balance in the energy sector.
Eric Rasmussen, EBRD Director, Natural Resources, said: “We are very pleased to support Egypt’s strong drive towards the renewal and overhaul of its energy sector. The modernisation of the downstream segment plays an important role in this effort. The project we are signing today represents a major step forward and it also demonstrates the EBRD’s commitment to support Egypt and its sustainable and successful development.”
Tarek El Molla, Egyptian Minister of Petroleum and Mineral Resources, said: “The project will contribute to one of the country’s main priorities in the ongoing oil and gas sector reform effort which is to optimise downstream performance and energy efficiency. The EBRD will also provide technical assistance, in addition to the US$200 million loan, which will support the sector-wide modernisation and reform programme which aims at reducing the fiscal deficit, attracting private sector capital and establishing a role model for improving public sector governance in Egypt.”
Sahar Nasr, Egyptian Minister of Investment and International Cooperation, said: “This energy efficiency project aims to contribute to the reduction of emissions which are harmful to public health and the environment. It will also support the modernisation of oil sector companies which will lead to an increase in production of high-quality fuel compatible with global standards, supporting Egypt’s transformation into a regional energy exchange centre. The project will also support economic growth through the creation of new jobs.”
Through its Green Economy Transition (GET) approach, the EBRD is strongly committed to supporting the economies where it invests, and Egypt in particular, to adopt environmentally-friendly development models. The Bank’s green finance commitments rose from €2.8 billion in 2016 to €4.1 billion in 2017, accounting for 43 per cent of total investments. The Bank had pledged, ahead of the 2015 Paris Agreement, to devote 40 per cent of its financing to green investments by 2020. This goal has been met three years ahead of schedule.
Egypt is a founding member of the EBRD and has been a country of operations since 2012. To date, the Bank has invested €3.6 billion in 80 projects in the country. The EBRD’s areas of investment include the financial sector, agribusiness, manufacturing and services as well as infrastructure projects such as power, transport and municipal water and wastewater services. The Bank has also provided technical assistance to more than 700 small and medium-sized local enterprises.