IFC plans $35 mn in loans for Indian-Egyptian chemical factory

IFC, a member of the World Bank Group, is providing up to $35 million in loans toward construction of a new chemical factory near Egypt's Red Sea coast, an Indian-Egyptian joint venture that will employ hundreds of people, spur the local economy an

IFC, a member of the World Bank Group, is providing up to $35 million in loans toward construction of a new chemical factory near Egypt?s Red Sea coast, an Indian-Egyptian joint venture that will employ hundreds of people, spur the local economy and help develop cross-border trade.

Egyptian Indian Polyester Company S.A.E., a joint venture between India?s Dhunseri Petrochem & Tea Limited, and two Egyptian government agencies, will build the plant near the town of Ain Sokhna. The factory will produce 420,000 tons of polyethylene terephthalate (PET) per year, a chemical used in the manufacture of lightweight plastic bottles for water and soft drinks. The factory is expected to employ 800 people during construction and 500 people full time when operational.

The project is also being financed through a $65.5 million loan and an $11.3 working capital facility provided jointly by Commercial International Bank and Ahli United Bank.

?We are excited to embark on the development of our first PET factory outside of India and are pleased to have IFC alongside as an investor, along with Egyptian Banks CIB and AUB,? says Mrigank Dhanuka, Vice Chairman and Executive Director of Dhunseri Petrochem & Tea Limited. ?Egypt is an advantageous choice for our investment, as the plant?s location in Ain Sokhna will allow us excellent logistical access to the European and North American markets, besides meeting internal demand in the country. This will be a state-of-the-art project in this region, which will give direct and indirect employment to more than 500 people and earn foreign exchange for the country.?

The project represents a further step in the Egyptian government?s strategy of increasing local value addition to the country?s oil and gas reserves, will stimulate job creation in related industries, and is expected to help grow Egypt?s foreign exchange reserves.

?IFC?s involvement in this project demonstrates our commitment to stimulating cross-border investments as way to help developing economies overcome short term challenges,? says Takuro Kimura, IFC Manager for Manufacturing, Agribusinesses and Services in the Middle East and North Africa. ?Additionally, the hundreds of jobs this new PET plant will create show the private sector?s important role generating employment.?

IFC is committed to fostering economic development in the Middle East and North Africa through an integrated investment and advisory services program, underpinned by the conviction that the private sector plays a key role in reducing poverty and creating jobs, particularly for the region?s large population of unemployed youth.