Kuwait National Petroleum Company (KNPC), a refining subsidiary of government-controlled Kuwait Petroleum Corporation, has raised $6.245bn in export credit agency (ECA)-backed financing, its first foray into international debt capital markets, to fund the Clean Fuels Project.

The funding package, which is the second tranche of an overall $10bn financing deal, is the world’s biggest ECA financing for corporate purposes and the largest ever ECA-backed funding in Kuwait.

The facility was supported by seven agencies including South Korea’s Korea Trade Insurance Corporation (K-sure) and Export-Import Bank of Korea (Kexim); Italy’s Sace, Japan Bank for International Cooperation and fellow Japanese ECA Nippon Export and Investment Insurance (Nexi); Spain’s Atradius, and UK Export Finance (UKEF), according to UK law firm Clifford Chance, which advised KNPC on the funding deal. The funding package included a $4.245bn club deal with 10 international banks under the K-Sure, Sace, Atradius and UKEF ECAs, and a $500m loan with four international banks under the Nexi ECA-backed funding.

The local NBK Capital, the investment banking arm of National Bank of Kuwait (NBK) was the exclusive financial adviser on the deal and Al-Tamimi & Company was hired as the Kuwaiti counsel to KNPC.

MEED reported in May 2016 that Japanese, South Korean, British and Italian ECAs were expected to participate in the deal. The UK’s HSBC was the coordinator. 

KNPC signed the first KD1.2bn ($4bn) tranche with local banks in the first half of 2016. NBK and sharia-compliant lender Kuwait Finance House were the mandated lead arrangers on the local debt tranche and NBK Capital was the financial adviser, while Clifford Chance was the legal adviser on the deal.

The loan, which had a 10-year tenor and an amortising repayment structure after a grace period, was participated in by 11 banks.

The Clean Fuels Project will upgrade and expand the Mina Abdullah and Mina al-Ahmadi refineries, two of Kuwait’s largest existing refineries. It will transform the two facilities into an integrated merchant refining complex with a focus on producing higher-value products such as diesel and kerosene for export.

The total refining capacity of this complex will go up to 800,000 barrels a day (b/d) when it is completed in 2019.

KNPC awarded contracts for the KD4bn scheme in mid-2014.

Clifford Chance has also advised NBK on the establishment of its $3bn global medium-term note (GMTN) programme and subsequent issuance. It was also the legal adviser to the state of Kuwait on the establishment of its GMTN programme and debut dual-tranche $8bn sovereign bond.

The law firm is currently advising on the Al-Zour North 2 independent water and power project (IWPP) as well as the Al-Zour North 1 IWPP.