The Egyptian Refining Company (ERC) is targeting the fourth quarter of the year for financial close on the $3.8bn Mostorod Refinery project, that has been held up as a result of the political instability in Egypt.

ERC is currently awaiting final approval from four state-owned firms that are planning to take an equity stake in the project. The four firms had all the necessary approvals in place to invest in the project before the regime of Hosni Mubarak was toppled in early February. They have since had to approach the transitional government for new approvals of the investments.

“Progress has been slow due to the post-revolution situation, which has still not completely settled, but we have been able to achieve a great deal in getting new letters of comfort for the lenders from the minister of finance, minister of petroleum and the prime minister, and are optimistic that we will be able to reach financial close by the end of the year,” says Tom Thomason, chief executive officer of ERC.

The project already has $2.65bn of bank finance in place, for which ERC is about to pay around $7m in commitment fees to ensure the banks continue to keep the money available, despite not yet being able reach financial close on the project financing.

The Mostorod refinery will be owned by a consortium of local public investors, the privately owned Citadel Capital, the Egyptian General Petroleum Corporation and a group of international development institutions.