The Egyptian Refining Company will complete agreements with three export credit agencies (ECAs) for funding part of the $2.4bn of debt for the development of the Mostorod refinery by the end of the year.

The project sponsor has been in talks with the three ECAs since May. The ECAs are Japan Bank for International Cooperation (Jbic), the Export Import Bank of Korea (Kexim), and Japan’s Nippon Export and Investment Insurance (Nexi).

JBIC will provide direct loans, Nexi will provide loan guarantees, and Kexim will provide both. The source says, “The ECA agreements are not in place yet but they are on schedule to be completed before the end of the year.”

The ECA agreements should cover about $1.2bn of debt for the project. The sponsor and their financial advisers have also decreased in size a loan from the European Investment Bank (EIB) from $750m to $500m. EIB will provide a direct loan to the project but requires bank guarantees. The source says that as a result of reduced risk appetite from banks in the wake of the credit crunch this has had to be reduced in size.

Once the ECA agreements are in place the sponsor will begin seeking commercial bank funding for the remainder of the project debt.

Societe Generale is acting as financial adviser on the project. The total project value is estimated at $3bn.

Signing of the final engineering procurement and construction contract should also occur before the end of the year following design amendments by the sponsors.

Egyptian Refining Company is a consortium of local investment house Citadel Capital, which holds 85 per cent, and state oil company Egyptian General Petroleum Corporation, which holds the remaining 15 per cent.

Egyptian Refining Company was not available to comment.