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The Arab Republic of Egypt 

Construction of a Flat Steel Plant

 

Loan No.: 372 Interest Rate: 3.0%
Beneficiary: Alexandria National Iron and Steel Company Grace Period: 4 years
Project Cost: KD 193.5 million Maturity: 19 years
Amount of Loan: KD 17.0 million Repayment: 31 semi-annual installments
Date of Loan Agreement: 08/02/1999 First Installment: 4 years following the first disbursement
Date of Effectiveness: -    

 

Objectives:

The project aims to meet part of the domestic demand on flat steel products by adding a new plant to produce flat steel as hot rolling coil, HRC. In addition, a portion of the output from the new plant will be directed for export. The project will utilize the natural gas that has been discovered, in large quantities, in the nearby area of Abu-Kir in order to increase its value added.

Description:

The project, which is expected to be completed by the year 200 1, consists of the following main components:

  1. Equipments and Machines: This includes the purchase and installation of all the necessary equipment and materials needed to establish a factory to produce about one million tons/year .The flat steel plant is composed of the two following sections: reduced iron and steel-making plant, and hot rolling mill. This is also includes an electrical sub-station, gas terminal, a seaport for materials and services at Dakhila with conveyor belts, quality control equipments, lime calcinating plant, and unit of industrial gases .

  2. Services and Technical Know-how: This includes acquiring of patents and technical know-how, management services, technical and engineering services, training, marketing, project management services, and company-wide information system.

  3. Civil Works: This includes the leveling of the plant site located next to the existing factories, along with construction of necessary buildings and other civil works.

Financing:

The Arab Fund loan covers about 8.7 % of the total project cost. It has been agreed during negotiation on loan agreements that the company must raise its capital by at least $220 million in order to participate in financing the project. The balance of costs will be financed by loans from the European Investment Bank, Cairo Bank, Cairo-Barclay's Bank, Islamic Development Bank, and IFC. The company went into negotiation with African Development Bank and a consortium of Egyptian banks to finance the last portion of the project.

 

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