Carbon Holdings faces new TPC project delays

Carbon Holdings’ $10.9 billion ECA/DFI-backed Tahrir Petrochemicals Corp (TPC) has progressed more slowly than expected after another delay to the deal timeline. The sponsor, which was meant to close the deal initially in 2018 (and subsequently in Q3 2019), has allegedly faced issues raising equity commitments to fund the scheme. Financial close is now targeted for the end of 2019.

The financing comprises an 18-year $5.4 billion loan with a $2.8 billion Euler Hermes-covered tranche (95% guarantee), a $400 million direct loan provided by OPIC, a $1.8 billion UKEF-backed tranche (100% guarantee) and a $400 million EDC loan. US-Exim will also provide a $10 million direct loan. Commercial banks have been mandated but remain confidential.

Carbon Holdings had planned to provide 51% of the $5.5 billion equity stake with zero credit pre-completion revenues from TPC (accounts for around $2 billion of net income a year) and capital from Oriental Petrochemical Corporation (Carbons’ existing polypropylene plant), while Egypt General Petroleum Corporation (EGPC) was expected to take 24% of the equity portion. The remaining 25% of equity is set to be provided by a number of DFIs and multilaterals such as the IFC, African Development Bank, African Finance Corporation, EBRD, CDC and Gulf Capital. But DFIs are not willing to put up equity for the project until Carbon Holdings put forward their share.

Once operational, TPC is expected to produce 4 million tonnes a year of product and will be the first of its kind in the Middle East and Africa.