By SUMMER SAID
Sadara, the $19.3 billion petrochemical joint venture between
state oil giant Saudi Aramco and Dow Chemical, said it has
signed loan facilities worth $10.5 billion to
provide additional financing for its giant chemical plant in
Jubail on the Gulf coast.
The bank facilities agreement was signed with
Export Development Bank Canada, Islamic Development Bank, the
Saudi Public Investment Fund and export credit agencies, the
firm said in a statement posted on the Saudi bourse
The loans will run until June 30, 2025 with the first draw
of financing expected during the third quarter of this
In April, Sadara said it had increased the size of an
Islamic bond, or sukuk, to $2 billion from the initial offering
size of $1.40 billion due to strong demand. The total aggregate
amount of financing to be obtained for the project will now be around $12.50
billion, Sadara said.
The Sadara complex, one of the world's largest chemicals
plants, is expected to produce more than 3 million tons of petrochemicals each year once it is
completed in 2016.
Khalid al-Falih, CEO of Saudi Aramco, said in 2011 that
Sadara would require large amounts of debt finance, and it was
considering various options.
Saudi Arabia is pouring billions of dollars into developing
its petrochemical industry to add value
to its vast hydrocarbon resources and create jobs for its young
and growing population.
The Sadara project represents Aramco's second
major investment in a large scale petrochemical complex in the
kingdom. It is already involved in a joint venture with
Sumitomo Chemical Co in Rabigh on the Red Sea.
Dow Jones Newswires