Financial close on the $969 million Oman India Fertiliser Company (Omifco) project is in sight following the initialling on 5 December of the offtake agreement between the sponsors. The scheme is being carried out by Oman Oil Company, with Indian partners Krishak Bharati Co-operative (Khribhco) and Indian Farmers Fertiliser Co-operative (Iffco - MEED 16:11:01).
Under the terms of the agreement, Iffco will guarantee the plant's 1.6 million-tonne-a-year (t/y) output of urea for 15 years, and Khribhco will take the plant's 250,000-t/y production of ammonia over a 10-year period.
A consortium of Snamprogetti of Italy, France's Technip, and Athens-based Consolidated Contractors International Company (CCC), was selected for the engineering, procurement and construction (EPC) package in mid-1999. The EPC contract for the plant, which is expected to take 36 months to complete, will be signed along with the final offtake agreement when financial close is achieved. This is expected to take place by April.
The project sponsors will finance $320 million of the total capital investment through equity. Debt financing for the remaining $649 million outlay will be weighted towards export credit finance from Italy's Sace and France's Coface. A team of ANZ Investment Bank, BNP Paribasand Arab Banking Corporationhas the mandate to arrange the commercial debt element. Syndication is expected to start in early 2002. Lazardis acting as financial adviser.
The project, aimed at alleviating chronic fertiliser shortages in India, has suffered extensive delays since it was first announced in the mid-1990s. 'Now the basics are in place we can expect to reach the next milestone quickly,' says a banker close to the scheme.
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