The $1,600 million funding for the construction of the Sorfert Algerie fertiliser plant is due to come to market before the end of 2007 and will be aimed exclusively at local banks.

A source close to the deal says the decision to borrow from Algerian banks is politically motivated. ‘There are some drawbacks in raising local funding for a project with cash flows purely in dollars, but it is a political decision to use local banks and they have the surplus cash,’ says the source.

Sorfert is a joint venture of Orascom Construction and Sonatrach. Societe Generale is the financial adviser and the funding has a 70:30 debt/equity ratio. The project involves the construction of two ammonia lines and a urea line in Arzew.