Regional energy sector lender the Arab Petroleum Investments Corporation (Apicorp) has announced signing an agreement with the Suez Company for Methanol Derivatives to finance the development of a formaldehyde and derivatives project in Egypt.

The project, to be located in Egypt’s Mediterranean coastal city of Damietta, is estimated to cost $60m. Apicorp will fund $35-$40m as part of the debt financing deal.

The plant will largely cater to the local market, although a share of its production will be exported in the initial years.

According to regional projects tracker MEED Projects, the scope of work on the project includes:

• Sulphur removal unit
• Reformer
• Methanol converter
• Methanol distillation
• Methanol storage
• Hydrogen gas clean-up unit

“The project comes in line with the ministry's strategy to diversify financing sources of oil projects; to reduce the need for hard currency and push forward economic development,” Egypt’s Petroleum Minister Tarek el-Molla said of the project.