Tasnee secures $1.36bn loans for factory projects
Work on three sites to be funded by nine banks and to start next year
National Industrialization Co. (Tasnee) and Sahara Petrochemical Co. have agreed an $1.4bn (SAR 5.1bn) loan with nine local banks to fund development of three new factories, Reuters reports.
The 16-year syndicated loan will finance investment in a new complex producing acrylic acid derivatives, the Saudi Arabian petrochemical producers said.
Operations at Saudi Acrylic Monomer Company, Saudi Acrylic Acid Co. and Saudi Superabsorbent Polymers Co. in Jubail Industrial City on the kingdom’s Gulf coast are scheduled to start in the first quarter of next year, they said.
The project is a joint venture with Dow Chemical Co. and Evonik and will be funded by loans syndicated by local banks.
The banks include Al-Rajhi Banking and Investment Corp, Alinma Bank, Riyad Bank, Samba Financial Group, Saudi British Bank, Banque Saudi Fransi, National Commercial Bank and Saudi Hollandi Bank, Tasnee said.
Tasnee will meet investors this week ahead of a potential debut Islamic bond, it said recently.
In February this year the Royal Commission for Jubail and Yanbu approved Tasnee’s development of a $373m plant (SAR 1.4bn) that will produce 80,000 tonnes of super-absorbent polymers annually.
Five other industrial mega projects worth a total of $5.2bn (SAR 19.5bn) were also approved for construction in Jubail by the Royal Commission at the time.
The largest deal was for the construction of a $3.2bn (SAR 12bn) facility to produce ethylene propylene diene monomer, rubber and black carbon that are used in automobile industry. The deal was signed with the Al Jubail Petrochemical Company (Kemya), a joint venture between Saudi Basic Industries Corp. and Exxon Mobil Corp.
The contracts are part of a massive industrial push in the region. Since the beginning of 2011, the two industrial cities had received licences for new projects totalling $39bn (SAR 146.3bn), while current investments in the regions stand at $180bn (SAR 675bn).