Citadel Capital, the leading private equity firm in the Middle East and Africa with $8.3bn in investments under control, announced today the International Finance Corporation (IFC) is investing $120m in the Egyptian Refining Company (ERC).
ERC is building a state-of-the-art $3.7bn second-stage oil refinery in the Greater Cairo Area that will produce over 4 million tons of refined products when completed, including 2.3 million tons of EURO V diesel, the cleanest fuel of its type in the world.
ERC’s production will be directed to the Egyptian market, which has a deficit of lighter fuel products.
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“We are delighted with the IFC’s participation in ERC as we proceed toward financial close on one of the largest private-sector industrial development projects in Africa. This project will have a notable effect on both Egypt’s economy and on the environment, particularly in the Greater Cairo Area, and has therefore enjoyed the full backing and support of the Government of Egypt and, in particular, of the Ministry of Petroleum,” said Citadel Capital Managing Director Marwan Elaraby.
“This project has the potential to optimize the use of Egypt’s petroleum product infrastructure, elevate the environmental and social standards within the refining industry, and create significant employment opportunities,” said Somit Varma, IFC Global Head of Oil, Gas, Mining, and Chemicals. “IFC is very pleased to support the project and to help catalyze new private sector investments through our strong partnership with Citadel Capital and the Government of Egypt.”
The refinery, to be located in the Greater Cairo district of Mostorod, will sell its production to the state-owned Egyptian General Petroleum Corporation (EGPC) under a 25-year offtake agreement at international prices.
As a principal investor, Citadel Capital owns approximately 8.2% of ERC.