By an OGJ correspondent
NICOSIA, Feb. 5 -- HSBC Investment Bank PLC signed a facility agreement with National Petrochemical Co. of Iran (NPC) providing $108 million credit to finance the export of equipment and services for the construction of a 600,000 tonne/year styrene monomer plant at Bandar Assaluyeh in Iran.
HSBC's agreement is guaranteed by the UK Export Credits Guarantee Department (EGCD), while reinsurance for part of the facility was obtained from the Italian export credit agency, Instituto per i Servizi Assicurativi del Commercio Estero (SACE)
Industry sources told OGJ Online that the UK division of Italy's Snamprogetti SPA, ENI SPA's engineering and main contracting company, will set up the plant under a contract covering the full range of works and services, except for the civil works and erection. Snamprogetti will use licensed technology from ENI and will carry out the project with Iran's Sazeh Consultants.
The executive director of Iran's massive South Pars petrochemical development project, Abbas Peivandi, earlier announced that the Italian company would invest $196 million in the facility, $122.3 million of which would be in foreign exchange and the rest in Iranian rials.
Nasser Homapour, HSBC's Senior Representative in Iran, told OGJ Online that completion of the transaction "represents an important step in HSBC's progressive engagement with Iran in general, and NPC in particular."
The new agreement marks HSBC's third export credit transaction with NPC in the past 12 months, all of them involving NPC, Snamprogetti, and Sazeh.
In February 2002, HSBC signed a $33.6 million export credit to Bank Tejarat, also guaranteed by EGCD. The credit is to finance construction of a 140,000 tonne/year carbon monoxide plant at Bandar Iman awarded by NPC subsidiary Fanavaran
Petrochemicals to Snamprogetti Ltd. UK and Sazeh Consultants.
Under terms of the contract, Snamprogetti will provide the technology license, basic engineering, equipment, and technical assistance, while Sazeh will carry out the detailed engineering and supply locally manufactured equipment.
In March 2002, HSBC also agreed to act as lead arranger in the cofinancing of a $155 million export credit facility for an ammonia and urea plant being constructed for NPC, again by Snamprogetti and Sazeh.
Last month, ECGD announced it is prepared to provide support for UK exporters trading with NPC for contracts of up to $20 million, without the need for NPC to enter into a structured finance arrangement.
ECGD said the decision would be a "major boost" to UK companies selling capital goods or providing services to NPC where contract values are of modest amounts.
ECGD is the UK export credit agency that provides insurance against nonpayment to UK exporters, arranges finance packages for buyers of UK goods by guaranteeing bank loans, and provides UK investors with up to 15 years' insurance against political risks.
ECGD withdrew coverage from Iran in 1979 after the Islamic revolution that ousted the Shah, but resumed coverage in October 2000.
