State-owned refiner Kuwait National Petroleum Co (KNPC) yesterday signed the first tranche of financing for its multi-billion-dollar Clean Fuels Project, a major plank of the country’s economic development plan. The tranche, provided by local banks and lasting for 10 years, is worth 1.2 billion dinars ($3.98 billion) and led by National Bank of Kuwait and Kuwait Finance House, KNPC chairman Jamal Al-Noori said at the signing ceremony.
Pricing details were not given. KNPC chief executive Mohammed Al-Mutairi had said last month that the first tranche would be worth 900 million dinars. No reason was given for the increase in size. The second tranche of the loan, which will be arranged by international lenders, is expected to be $6 billion and close by the end of this year, KNPC acting chief executive Ahmad Al-Jimaz said at the ceremony.
The two tranches comprise about 70 per cent of the total financing required for the project, while the remaining 30 per cent will be financed from KNPC’s own funds. National Bank of Kuwait’s share of the first tranche was worth 400 million dinars, and Kuwait Finance House’s portion was 275 million dinars, NBK’s chief executive Isam Al-Sager said at the ceremony. Eleven banks, including five Islamic lenders, took part in the first tranche. Part of the country’s 30 billion dinar economic development plan, the Clean Fuels Project will upgrade and expand two of the Gulf state’s largest refineries with a focus on producing higher-value products such as diesel and kerosene for export.
Meanwhile, work on Kuwait Petroleum Corporation’s Clean Fuel Project (CFP) is 50% complete and is expected to be finished on schedule in 2018, Chief Executive Officer of KPC Nizar Al-Adsani said yesterday. Al-Adsani said that CFP is amongst the most monumental projects KPC has undertaken, which aims to help ramp up the country’s port capacities. Moreover, he noted that increased port capacity would help propel Kuwait into new markets, which would in turn, help bring the country’s 2030 vision of increased development to fruition. Relying on foreign financial aid is an integral part of KPC’s strategy, as it aims to bolster its ties with local banks, Al-Adsani added.
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