Deutsche Bank AG supports $871 million credit facility to Irkutsk Oil Company
The bank has entered into an agreement to provide JBIC / NEXI-covered financing to Irkutsk Oil Company (INK) for the construction of a new petrochemicals plant, Irkutsk Polymer Plant, in East Siberia with support from Japanese suppliers.
Deutsche Bank AG, acting as Facility Agent and Lender, together with Japan Bank for International Cooperation (JBIC) as direct lender and a consortium of three commercial banks under Nippon Export and Investment Insurance (NEXI) coverage, today announced an agreement to provide a 13-year, 871 USD million credit facility to Irkutsk Oil Company (INK), a Russian limited liability company.
In addition to Deutsche Bank AG, Tokyo Branch, the commercial banking consortium includes Société Générale, Tokyo Branch, and Goldman Sachs Realty Japan Ltd. alongside JBIC.
The loan is provided to INK, which in turn will lend the funds to Irkutsk Polymer Plant LLC, INK’s wholly owned subsidiary. The purpose of the loan is to support the purchase of equipment from multiple vendors, with the main equipment for both the ethylene and polyethylene production facilities in the city of Ust-Kut, Irkutsk Region in East Siberia to be provided by Toyo Engineering Corporation.
The construction of a new ethylene and polyethylene production plant is the latest component of INK’s larger Gas Project, which initiated a full-scale gas development strategy to fully recover and monetise gas components throughout the entire gas cycling process. INK aims to utilize its sizable gas resources and diversify its business for transition from the pure upstream oil production on which INK has primarily focused to the downstream sector, such as production of plastic. The new polymer plant will support INK’s business diversification amid growing demand for high value-added polyethylene products and will create new job opportunities in the Irkutsk Region.
Irkutsk Polymer Plant will employ the most advanced modern technologies and commit to compliance with the strictest industry standards – the IFC Performance Standards of Environmental and Social Sustainability and the Equator Principles – and will undergo regular independent monitoring in that regard. The loan will support INK’s effort to further decarbonize its business by utilising associated petroleum gas in adherence with the company’s world-class ESG Policies.
Daniel Schmand, Global Head of Trade Finance & Lending, Head of Corporate Bank for EMEA, Deutsche Bank AG, commented: “Deutsche Bank has a long history of supporting important infrastructure projects in Russia, of which this transaction is a perfect example. The construction of INK’s new facility will support economic development in the region, in addition to creating opportunities for fruitful business ties between Japanese companies and the Russian petrochemical sector.”
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