World Bank’s IFC invests in Egypt petrochemicals as part of $2 billion push

International Finance Corporation (IFC), the investment arm of the World Bank, will invest $25 million in Egypt’s Carbon Holdings, a petrochemical producer, as part of plans to commit $2 billion in the country.

The IFC will look for more ways to provide financing for Carbon Holdings, Mouayed Makhlouf, IFC director for the Middle East and North Africa, said in an interview in Dubai. The Washington-based lender plans to put about $500 million a year in Egypt over the next four years with most of the money going to power and renewable energy projects, he said.

“There are risks in Egypt, but there are a lot of potential opportunities in the medium to long term,” Makhlouf said. The IFC, which promotes private businesses, has invested about $1.4 billion in Egypt since 2011 and has about $1 billion in assets there, he said.

The most populous Arab country relies on imports of energy and manufactured goods to meet consumer demand. It’s suffering from a drop in income from tourism and a shortage of dollars that’s hurt business activity and investment. Egypt’s credit outlook was cut to negative from stable at S&P Global Ratings this month.

Carbon Holdings is seeking financing to build a petrochemical complex that will lessen Egypt’s dependence on imports for products used in industry and to make plastics, Chief Executive Officer Basil El-Baz said in the same interview in Dubai. The company plans to complete financing this year for the $7 billion Tahrir petrochemicals complex at Ain Sokhna on the Gulf of Suez, he said.

The complex will start operating in 2021 and process 4 million metric tons of naphtha a year to make polyethylene, polypropylene and other chemicals, according to El-Baz. Carbon Holdings is seeking about $5 billion from lenders including U.S., U.K. and Italian export credit agencies for the complex, he said.

Source: Bloomberg