Egyptian Fertilizers Company

Location:

Egypt

Project number:

49947

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

11 Apr 2018

Status:

Disbursing

PSD disclosed:

03 Jul 2018

Project Description

  • Provision of a USD 60mn (EUR 48mn) long term loan to the Egyptian Fertilizers Company ("EFC" or the "Company"), a joint stock company incorporated in Egypt. EFC is a fully owned subsidiary of OCI N.V, a global producer of natural gas based fertilisers and industrial chemicals, listed on Euronext with operations in North America, Europe and North Africa.
     
  • EFC's plants are located at the port of Ain Sokhna, Egypt's deepest port, approximately 55 km south of the Suez.
     
  • EBRD's involvement is expected to support the creation of job opportunities for youth in Egypt.

Project Objectives

  • The loan is part of the refinancing of EFC's existing USD 445mn multi-tranche, multi-currency outstanding debt package. The loan will restructure the company's balance sheet and invest in measures to increase competitiveness.

Transition Impact

  • The primary Transition Impact of the Project is under the "Inclusive" quality as the Company will commit to an annual internship program throughout the lifetime of the loan. Additional Transition Impact arises under the "Resilient" quality as the Project supports the Borrower's wider balance sheet restructuring exercise carried out to ensure economic sustainability of the Company's operations.

Client Information

EGYPTIAN FERTILIZERS COMPANY SAE

EBRD Finance Summary

USD 60,000,000.00

Total Project Cost

USD 442,612,682.00

Environmental and Social Summary

  • Categorised B (2014 ESP).  The production of fertilisers may be associated with various environmental and social (E&S) issues although these can be addressed through standard industry mitigation measures.  The EBRD loan is for refinancing purposes and no capex is planned.  E&S due diligence has been conducted by the Bank and focussed on the performance of the existing plant,  corporate E&S management provisions and the Company's capacity to meet the Bank's E&S requirements.  The Company is already familiar with international lender standards and demonstrates good international industry practice (GIIP).  An E&S action plan has been agreed with the Company to structure its operations in line with the Bank's requirements and EU standards, specifically EU Best Available Techniques (BAT) for the sector.  Key ESAP actions are noted below
     
  • The Company operates a 1.55 million ton per year granular urea production plant in Ain Sokhna.  The plant employs a modern production process and is relatively new having been commissioned in 2000 with a second production line added in 2006 and various improvements from 2009 to 2012.  The plant produces both ammonia and urea with all ammonia being consumed in the urea production process.  Feedstock is natural gas and water (steam) and, where necessary, additional ammonia and CO2 from the adjacent sister EBIC ammonia plant.  E&S risks are managed through internationally certified management systems drawing on the standards of the holding company, OCI N.V.  The Bank requires an integrated approach to E&S management and the ESAP therefore requires that the various systems are integrated into one management system.  Management capacity is sufficient and key personnel are experienced with the application of GIIP and lender requirements.  Company HR provisions are in line with the Bank's requirements. Management system requirements and HR provisions also extend to contractors and suppliers.
     
  • The plant design and operational performance is generally in line with EU BAT for the sector.   Emissions to air are within BAT limits and the Company is in the process of installing a continuous emissions monitoring system (CEMS) to monitor emissions on a real time basis.  The Company manages its energy consumption but will implement an energy management system with an objective to realise potential energy savings. The ammonia production process produces substantial amounts of CO2 although all of this consumed within the urea production process.  CO2 is also sourced from the EBIC plant via a pipeline when additional CO2 is required.  Excess CO2is as a result of boilers and onsite generators.  The Company will maintain a GHG inventory and include in this inventory indirect emissions from electricity usage and CO2 sourced from EBIC to offset site CO2.
     
  • Health and safety risks are managed through an ISO certified management system.  Process risks and the risks associated with routine and non-routine activities are considered and the usual provisions such as PPE, training, permit to work system, drills, lock out tag out, gas detectors, breathing apparatus, etc., are in place.  Due to the volume of ammonia stored on site, the plant, if it were in Europe, would be classified as an upper tier establishment under the Seveso III Directive on industrial safety.   To align with the Directive, as required by EBRD PR3, the Company will develop a major accident prevention policy and conduct a detail quantitative risk assessment (QRA).  Any recommendations from QRA will need to be implemented by the Company including updates to existing emergency preparedness and response procedures.  It is should be noted that the plant is located in a predominantly industrial area and is substantially distant to residential areas.  Existing H&S provisions address the requirements of the EU ATEX Directive on managing explosive atmospheres.
     
  • To align with the Bank's stakeholder engagement and information disclosure requirements, the Company will develop a stakeholder engagement plan or procedure and routinely disclose pertinent E&S information to stakeholders.  This would include communicating process safety risks and controls and emergency preparedness and response provisions to stakeholders.  Further the Company will develop an external grievance mechanism.

Technical Cooperation

None.

Company Contact

Reham El Beltagy
Reham.elbeltagy@orascom.com
+20 122 2188364
www.oci.nl

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