Islamic Corporation for the Development of the Private Sector (ICD)
  • Multimedia content

  • Images (1)
    • EBRD and its partners strengthens safety and environmental standards in Egypt's energy sector
  • All (1)
Source: Islamic Corporation for the Development of the Private Sector (ICD) |

EBRD and its partners strengthens safety and environmental standards in Egypt's energy sector

We are very proud to continue our cooperation with ADES, a partner committed to safety and environmental standards

CAIRO, Egypt, December 10, 2015/APO (African Press Organization)/ --

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 US$170 million to Advanced Energy Systems SAE (ADES), an independent Egyptian oil services company.

As part of the facility the EBRD is extending US$28 million to ADES, supporting a company that applies the best environmental, health and safety (EHS) standards in the local oil and gas industry.

This US$170 million syndicated loan includes a US$25 million Islamic finance tranche provided by the Islamic Corporation for the Development of the Private Sector (ICD - a member of the Islamic Development Bank)  (www.ICD-idb.org) 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 programme to promote the adoption of health and safety standards across the wider oil and gas sector in Egypt (http://www.ebrd.com/egypt.html)

Egypt suffers frequent shortages of the 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 these issues. The loan will help ADES improve compliance with the highest environmental, health and safety (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 mobilised to assist the Egyptian authorities in bringing national EHS regulation up to internationally recognised standards and supporting capacity-building within Egyptian companies.

Lorenz Jorgensen, EBRD Loan Syndications Director, said: “We are very proud to continue our cooperation with ADES, a partner committed to safety and environmental standards. The transaction represents a landmark project for ADES’ growth and for the EBRD in the SEMED region. It is the first transaction led and arranged by the Bank in this region, the first transaction in the Bank’s history to include an Islamic finance component and our first direct partnership with our colleagues from the ICD and AIB. We look forward to continuing our work with ADES and our seven co-financiers.”

Dr Mohamed Farouk, ADES Chief Executive Officer, said: “This syndication is instrumental to ADES’ growth plan by allowing us to refinance current debts, acquire new assets and provide the necessary working capital. Having these eight financiers as our lenders with more than 50 per cent of the money coming from overseas is testimony to ADES’ strategy and performance in the current tough market. This loan will enable us to remain the market leader for offshore drilling services in Egypt.”

Khaled Al Aboodi, CEO of ICD, said: “We are very pleased to work with the EBRD as a major partner in supporting our member countries. The ADES transaction is the first product of cooperation between the ICD/IDB Group and the EBRD, and a concrete example of how Islamic financing can meet our clients’ aspirations. We are delighted to bring our support to ADES as it takes its fortunes to the next level and this will also help Egypt, a key member country of the ICD, to address its energy challenge.”

Adel Ezzat, AIB General Manager, Corporate Banking Group, said: “The successful closure of this transaction, the first cooperation between the AIB, EBRD, ICD and major players in the domestic and international banking sectors, shows confidence in ADES’ strategic growth over the past five years, in which the cooperation between AIB and ADES has grown and developed. It also reflects AIB’s role in supporting the Egyptian economy by providing banking facilities to firms in strategic economic sectors such as power, oil and gas. AIB sees this transaction as the start of a fruitful cooperation that will benefit the economies of AIB, EBRD and ICD member states.”

The EBRD has invested more than €1 billion in Egypt through 27 projects (including regional ones) since the Bank began working in the country at the end of 2012. The EBRD’s investments there include the natural resources sector, the financial sector, agribusiness, manufacturing and services as well as infrastructure projects such as power, municipal water and wastewater (http://www.ebrd.com/news/2014/ebrd-upgrades-sanitation-standards-in-egypt.html) and contributions to the upgrade of transport services (http://www.ebrd.com/news/2014/ebrd-funds-modernisation-of-egypts-railway-system.html).

Distributed by APO Group on behalf of Islamic Corporation for the Development of the Private Sector (ICD).

Contact: 
Nibal Zgheib
Tel: +44 20 7338 7753
Email: zgheibn@ebrd.com

The EBRD, owned by 64 countries and two intergovernmental institutions, is supporting the development of market economies and democracies. Follow us on the web (http://www.ebrd.com), Facebook (http://www.facebook.com/ebrdhq) and Twitter (http://www.twitter.com/ebrd).

Advanced Energy Systems SAE (ADES) is an independent oil services company incorporated in Egypt and controlled by the Egyptian Abbas family, which operates a fleet of offshore drilling rigs and equipment in the country.

AIB was established in 1974 by international treaty. The main purpose of its activities is to carry out banking, financial and commercial activities related to projects of economic development and foreign trade, especially for the benefit of its member states.

ICD (www.ICD-idb.org) is a multilateral organisation, part of the Islamic Development Bank Group. ICD was established in November 1999 to promote economic development of its member countries in accordance with the principles of Sharia through private sector development. ICD currently has 52 member countries around the world. ICD has approved approximately US$100 million in Egypt in the agribusiness, financial and energy sectors.