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 website.
The loans will run until June 30, 2025 with the first draw of financing expected during the third quarter of this year.
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