ArabFinance:  Qalaa Holdings (CCAP), an African leader in energy and infrastructure, has just announced that it has completed a US$ 120 mn funding round for its subsidiary, the Egyptian Refining Company (ERC), the final such round requested by ERC's project finance lenders, consisting of a US$ 70 mn capital increase and a US$ 50 mn shareholders loan, bringing, the total equity component up to c. US$ 1.5 bn and the total cost of the megaproject up to US$ 4.4 bn.

According to Qalaa Chairman and Founder, Ahmed Heikal, the US$ 120 mn in new funding will be utilized to pay the first project finance debt installment and part of the second debt installment for ERC which is now 99.6% complete and set to begin full commercial operations during the third quarter of 2019.

Qalaa Holdings has taken a non-interest bearing loan from its principal shareholder to finance its share in the capital increase.

'The majority of our large shareholders have stepped up their commitments and given us their full support which is a testatment to the solid fundamentals of a project that has the potential to become economically and environmentally transformative for Egypt,' said Heikal. ERC has already started trial operations earlier this year and as of May it had supplied c. 160,000 tons of low sulfur European specs diesel, naphtha, and high-octane gasoline to the Egyptian General Petroleum Corporation (EGPC). We look forward to the official launch of operations in the coming months.'

ERC is the largest private sector-led infrastructure megaproject in Africa with a broad spectrum of debt and equity investors led by Qalaa and including the Egyptian General Petroleum Corporation (EGPC) and global development finance institutions alongside Egyptian, Gulf and international investors.

As an import substitution project, ERC will significantly slash Egypt's import bill for petroleum products. The refinery has the capacity to produce c. 4.7 mn tons of refined products and high-quality oil derivatives, representing 40% of Egypt's current imports. The project created 700 permanent jobs and more than 15,000 jobs during peak construction in addition to the transfer of knowledge that occurred when global experts worked alongside local employees to bring this project to life.

As a producer of Euro V diesel, ERC will improve air quality by reducing the amount of sulfur emissions. The adjacent state-owned Cairo Oil Refiner (CORC) provides ERC with feedstock, which it then refines into higher-value products like Euro V diesel that are sold on the local market. ERC uses cutting-edge technology to abide by global environmental standards and will prevent the release of 96,000 tons of sulfur annually, or c.29% of Egypt's present-day total.