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Azerbaijan to build 6 new plants

01 December 2009 16:02 (UTC +04:00)

Nizami Piriyev, Chairman of AzMeCo, said the construction of planned 6 plants will cost about $1.1 billion in total.

â€œThese plants will go on stream by 2013. Of the funding, 33% is provided by the EBRD and the rest by other banks. At the first phase, the first methanol plant will spend $300 million. The second will cost $400 million, the third - $250 million, fourth - $ 30 million, the fifth - $100 million, the sixth - 30 million,â€ he added.

In his speech at the signing ceremony, former British Prime Minister Tony Blair described the agreement as an indicator of confidence of international organizations and a number of countries in Azerbaijan.

According to him, with the construction of the planned plants, Azerbaijan will be able to offer Europe several energy products.

AzMeCo is the operator for construction of a plant with the production capacity of 720 000 tonnes of methanol per year, and the daily capacity of up to 600 tonnes of ammonia and up to 1150 tonnes of urea per day by processing natural gas. After commissioning at the end of 2010, the plant will in future development phases produce up to 450 tonnes of acetic acid, and 500 tonnes of dimethyl ether, and 80 tonnes of formaldehyde and up to 40 tonnes of chalk.

The project is co-financed by the EBRD, International Bank of Azerbaijan, Canadaâ€™s EDC and Black Sea Trade and Development Bank.

Funding from the EBRD will be implemented in two tranches: 90 million will be allocated for a period of 9 years, the remaining 30 million will be provided for 10 years.
The EBRDâ€™s $120 million financing will come with 2 separated tranches:
â€¢ a USD 90 million senior loan up to 9 years;
â€¢ a USD 30 million Senior Performance-Linked Financing fully re-paid in year 10.
The project will stimulate the development of petrochemical cluster in Karadagh, which will generate more investments and new employment opportunities in the country.
Since the beginning of its operations in Azerbaijan, the EBRD has committed over $1 billion across more than 90 projects in corporate, financial, infrastructure and energy sectors.