Within the framework of the state’s efforts to maximize the added value of its natural resources, especially in the field of energy, which is one of the most important pillars of development and advancement of the economy, and in light of the projects of the Ministry of Petroleum and Mineral Resources to develop state-owned refineries with the aim of meeting the local market’s needs of petroleum products to reduce the import bill for those products. And following the joint cooperation agreement between the Egyptian government and the Italian government in 2015, with the aim of cooperating to establish and finance several projects in the field of petroleum and energy.
During EGYPS 2022 conference, contracts were signed for financing the diesel hydrocracking complex project in Assiut, with a total financing amount of 1474 million US dollars granted by 6 banks and international financing institutions, namely, the Italian CDB, Credit Agricole for Investment and Finance, UniCredit Italy, HB Bank. SBC Middle East, BNP Paribas France and Société Générale France, with the guarantee of the Italian Export Development Corporation Sacchi. Which achieves the objectives of the Egyptian banking system from providing foreign currency funds from abroad. This financing is also pioneering of its kind due to the introduction of a re-lending system, whereby international banks lend to the National Bank of Egypt and Banque Misr with the aim of re-lending to the project.
The alliance of the National Bank of Egypt and the National Bank of Kuwait plays the role of the financial advisor for the project, Credit Agricole plays the role of the structuring bank and general coordinator of financing, and HSBC Bank plays the role of general agent for the facilities.
It is worth noting that The contract for the general contractor for the project was signed during the EGYPS 2020 conference, and the project is slated for completion in the last quarter of 2023.
The project is part of the Ministry of Petroleum’s strategic plan to modernize the refining sector to achieve self-sufficiency and adhere to international environmental standards. As the diesel hydrocracking complex works to convert the diesel produced from refining operations at the Assiut Oil Refining Company – which is a low-value and environmentally harmful product – into petroleum products of high economic value with international environmental specifications such as diesel with European specifications (Euro 5) and butane in quantities that achieve self-sufficiency Upper Egypt has petroleum products, especially diesel. Which will have a significant impact on reducing the bill for importing petroleum products, as the value of the products manufactured in the complex, which are currently imported from abroad, amount to more than one and a half billion dollars annually, in addition to reducing logistical expenses as the product is manufactured in the same geographical scope of the target market.
With regard to the environmental impact, the project will have a significant impact on reducing harmful emissions, especially carbon emissions, due to the use of the latest technical technologies in the construction of the complex, in addition to the zero-discharge system for liquids. The project also has an important social impact like providing job opportunities, developing the local community and opening new horizons for development in Upper Egypt.