International Finance Corporation (IFC), a member of the World Bank Group, is providing a financing package of US$144 million to Sonker Bunkering Company, to help develop vital new energy infrastructure and boost the performance and competitiveness of Egypt’s ports.
IFC’s financing package includes a loan of up to US$70 million, US$52 million mobilized from partners and US$22 million in mezzanine financing. The package will go toward the development of Egypt’s first private liquid bulk terminal at Sokhna Port on the Red Sea.
The new facility will handle the import of three essential energy products, liquid petroleum gas, gasoil, and liquefied natural gas. Demand for all three is expected to continue to rise over the next few years as the need for power increases amid continued population growth.
Ossama Al Sharif, Sonker Managing Director, said:
"The Egyptian government is taking a quantum leap toward achieving a more resilient and sustainable economy,”“They have helped us develop this pioneering terminal as a public-private partnership to meet the growing demand for energy, and help transform the area into a regional hub for trading petroleum products.”
The project is expected to boost Egypt’s port sector by delivering key energy handling infrastructure at a time of declining capacity in existing ports and strong energy demand. It will also create a number of jobs around the operation of the terminal.
Nada Shousha, IFC Country Manager for Egypt, added:
"IFC’s financing will help create vital energy infrastructure for Egypt at a time when the demand for power is growing. Our aim is to spur job creation and minimize infrastructure gaps by increasing private sector participation in the economy. We also hope to send a positive market signal to international and domestic private sector investors."
The investment is part of World Bank Group strategy in Egypt to encourage private investment and support job creation in a key infrastructure sector, while providing much-needed long-term foreign currency financing and helping to address the country’s energy security issue.
From fiscal year 2011 through fiscal year 2015, IFC’s investments in Egypt totaled close to US$1.2 billion, including mobilization funds. These investments covered 18 projects across a host of sectors, including financial markets, infrastructure, oil and gas, agribusiness, manufacturing, and health care.