ERC www.ercegypt.com is a 4.7 million tonne (approximately 88,000 barrels per day) high technology refinery facility that will convert heavy fuel oil known as Atmospheric Residue into light distillate products, predominantly diesel. ERC’s investment cost is $3.7bn, of which $2.3bn are funded by senior debt from export credit agencies, multilaterals and commercial banks; $225m are finance through subordinated debt; and $1.2bn via equity. InfraMed invested $100m equity in Orient, the company that indirectly controls ERC. Other key co-investors include Qalaa Holdings (formerly Citadel Capital), Qatar Petroleum International, the IFC of the World Bank group and German DEG. Commercial Operations Date is set for early 2018.
Egypt is a diesel-thirsty market with a growing demand. Despite local oil production, with aging refineries, the country is a net importer of diesel. ERC’s technical and competitive advantages will contribute to address this significant market need. Its output is expected to reduce future imports by c. 50%. ERC’s strategic location, adjacent to existing refining units and storage facilities in the Greater Cairo area, will facilitate the refining process and ease all related transportation and logistics, hence saving costs. ERC projects attractive return on investment, supported by the senior debt leverage and the well-structured commercial feedstock and off-take contracts.