PAKISTAN: Fertiliser expansion receives financing

17 January 1997

Engro Chemical Pakistan says it expects to complete a financing package for its fertiliser expansion project during early 1997. The company has already signed agreements for foreign currency loans and expects to decide details of the local financing soon.

The total cost of the expansion has been put at $59 million. Total foreign currency costs are $32 million. The International Finance Corporation signed an agreement on 6 January to provide $18 million, including a loan of $9 million for its own account and a syndicated loan of $9 million. The Commonwealth Development Corporation has agreed to provide a loan of $11 million. The remaining $3 million is to come from Engro's own sources.

Local currency costs total $27 million. The company says that this includes $2 million for working capital, $9 million in financing costs and $16 million in import duties on equipment, other local taxes and local construction costs. The company says that it will raise the $27 million through a mixture of local borrowing and internal funds.

The project will increase efficiency at Engro's ammonia urea plant. Capacity will be increased to 850,000 tonnes a year (t/y) from 750,000 t/y, whilst raw material requirements will not increase. The project engineer is Japan's Toyo Engineering Corporation. Construction and equipment supply contracts are yet to be finalised.

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