Petroleum Africa
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Sunday, December 13, 2015
For the first time in the southern and eastern Mediterranean (SEMED) region, the European Bank for Reconstruction and Development (EBRD) led and arranged a syndicated loan, consisting of a loan facility of up to $170 million to Advanced Energy Systems SAE (ADES), an independent Egyptian oil services firm. As part of the facility the EBRD is extending $28 million to ADES, supporting a company that applies the best environmental, health and safety (EHS) standards in the local oil and gas industry.
The syndicated loan includes a $25 million Islamic finance tranche provided by the Islamic Corporation for the Development (ICD – a member of the Islamic Development Bank) and is the first EBRD joint project with ICD and the Arab International Bank (AIB).
In addition to providing financing, AIB will undertake the roles of global facility agent, conventional facility agent, and security agent. Financing will also be provided by Société Arabe Internationale de Banque, Al Ahli Bank of Kuwait, Credit Libanais S.A.L., AlexBank and the Federated Project and Trade Finance Core Fund.
The loan will be complemented by a comprehensive policy dialogue program to promote the adoption of health and safety standards across the wider oil and gas sector in Egypt.
Egypt suffers frequent shortages of natural gas that supplies the country’s power plants. The introduction of offshore drilling equipment will help foster the development of domestic natural gas production, which will reinforce energy security. This will be done while improving the standards of local oil and gas exploration and production, leading to higher efficiency and a reduced impact on the environment.
The EBRD package of a targeted loan and policy dialogue will address the issue of higher efficiency and the reduction of the impact oil and gas drilling has on the environment. The loan will help ADES improve compliance with the highest EHS standards through annual certification to international ISO and OHSAS standards. A corporate governance action plan will also be implemented, thereby setting standards for business conduct in the industry.
Technical cooperation funds will be mobilized to assist the Egyptian authorities in bringing national EHS regulation up to internationally recognized standards and supporting capacity-building within Egyptian companies.
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