Project Finance International (a Thomson Reuters Entity) awarded the “African Petrochemical Deal of 2018” for the US$ 1 billion long term project finance deal of Indorama Eleme Fertilizers & Chemicals Limited, Nigeria (a subsidiary of Indorama Corporation, Singapore) for its Fertiliser Line 2 expansion project (which will result in doubling of Urea capacity from 1.4 million tpa to 2.8 million tpa).
The deal was put together in challenging conditions for the Nigerian market, but it was well structured and had the backing of revenues from the first line financed in 2013 (which was also awarded The African Petrochemical Deal of 2013 by PFI).
The US$ 1 billion long term financing was lead managed by IFC, who directly lent US$ 100 million (as well as under its managed co-lending portfolio program) together with equally large participations by joint mandated lead arrangers and lenders - European Investment Bank, Yes Bank, CDC Group, African Development Bank, Bank of Baroda and Standard Bank. In addition, Standard Chartered, Bangkok Bank, FMO, DEG, Emerging Africa Infrastructure Fund, Proparco, ICICI Bank and Citibank also participated in the deal.
The financing structure was more on a corporate basis, given the existing revenues from the first line which was operating since 2016, with significant reduction in pricing due to lender group’s existing relationship with the Sponsors. No MIGA cover or partial risk guarantee were required. The tenor on the debt was 11 years door-to-door for DFIs and 8 years for commercial banks with a four-year principal grace period.
Indorama Corporation, Singapore is one of Asia’s leading chemical holding companies.