Egyptian state-owned Middle East Oil Refinery (Midor) is aiming to finance the $1.4bn expansion of the Alexandria refinery by the end of 2016.
Conditions in Egypt, especially the hard currency shortage, will make this challenging.
Midor appointed Frances BNP Paribas and Credit Agricole, and Italys Cassa Depositi e Prestiti as mandated lead arrangers for the $1.2bn loan in February 2016. They have not yet syndicated the loan.
Italian export credit agency Sace will guarantee some of the loan. National Bank of Egypt and National Bank of Abu Dhabi are the financial advisers.
Midor will contribute $230m of equity to reach a debt-to-equity ratio of 80:20.
The expansion will increase the refinerys capacity from 100,000 barrels a day (b/d) to 160,000 b/d, and maximise production from existing facilities. The refinery will produce high-quality petroleum products to meet European standards for the domestic market, focusing on middle distillates including liquefied petroleum gas (LPG), diesel and gasoline.
The Italian subsidiary of Frances Technip has signed a contract for the main engineering, procurement and construction (EPC) of the scheme. Midor signed two agreements with US oil company UOP to acquire licences for the technology for the expansion.
The project is due to be commissioned by the first quarter of 2019.
Privately owned Tahrir Petrochemicals Complex is also hoping to conclude its financing deal in the second half of 2016.