ICBC contributes $80 million USD to the $2.145 billion USD tranche of a $2.47 billion USD syndicated loan for Project Ceres

Project narrative

On April 26, 2023, financial close was reached on a deal in which a syndicate of 14 banks — including the Industrial and Commercial Bank of China (ICBC) — entered into a $3.73675 billion AUD ($2.47045 billion USD) syndicated senior secured term facility agreement with Perdaman Chemicals & Fertilisers (Finance) Pty Ltd — an Australia-incorporated special purpose vehicle (SPV) and wholly-owned subsidiary of Perdaman Chemicals and Fertilisers Pty Ltd (PCF), an Australia-incorporated joint venture of Australian-family owned company Perdaman Industries Pty Ltd (70% equity stake) and U.S.-based investor Global Infrastructure Partners (GIP) (30% equity stake) — for Project Ceres. This loan was divided into three tranches: a $2.145 billion USD ($3.24449 billion AUD) credit facility tranche, a $180.00 million USD ($272.26 million AUD) export credit facility tranche, and a $220.00 million AUD ($145.45 million USD) government loan tranche. The loan carried a maturity period of seven years and was structure as mini-perm financing. This loan was secured (i.e. collateralized). 12 lenders contributed to the $2.145 billion USD tranche, including ICBC, which contributed $80.00 million USD ($121.01 million AUD). In addition to ICBC, the following lenders contributed the respective amounts to the tranche: BNP Paribas S.A. ($200.00 million USD; $302.52 million AUD), Commonwealth Bank of Australia (CBA) ($200.00 million USD), HSBC ($150.00 million USD; $226.89 million AUD), Intesa Sanpaolo S.p.A. ($200.00 million USD), MUFG Bank, Ltd. ($200.00 million USD), National Australia Bank Limited (NAB) ($200.00 million USD), Banco Santander, S.A. ($200.00 million USD), Société Générale S.A. (SocGen) ($235.00 million USD; $355.46 million AUD), Standard Chartered Bank PLC ($80.00 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($200.00 million USD), and Westpac Banking Corporation ($200.00 million USD). MUFG served as mandated lead arranger. Export Finance Australia (EFA) was the sole lender of the $180 million USD export credit facility and Northern Australian Infrastructure Facility (NAIF) was the sole lender of the $200 million AUD government loan. The proceeds were to be used by the borrower to finance the construction of a $4.197 billion USD ($6 billion AUD) urea plant with a production capacity of 2.3 million tons of nitrogen-based fertilizer urea per year, located within the Burrup Strategic Industrial Area (BSIA) on the Burrup Peninsula 20 kilometers northwest of Karratha and 10 kilometers northeast of Dampier, Western Australia; it would be the largest urea plant in Australia. The project included the main production facility (the urea plant), administration, maintenance and storage infrastructure, conveyor and port storage including a stockpile shed, ship loading facilities, pipelines,. The plant would source natural gas from the under-construction Scarborough gas field off Western Australia’s coast processed via Woodside’s and GIP’s Pluto LNG Train 2 near Karratha, converting the gas to ammonia and then to urea, with the gas leading to 80% lower emissions than existing coal-fed urea plants. The plant was designed to use seawater for cooling and catalytic reforming, energy transition-enabling features. Perdaman committed to making the planet net-zero in emissions by 2050 and as such secured land for a 100 MW solar farm. The Government of Australia and NAIF provided financing to support early design works and upgrades to public infrastructure, including road works, New Dampier Cargo Wharf, and seawater supply infrastructure to support the project. The plant signed a 20-year take or pay fixed price gas supply contract with Woodside Energy Group for feedstock for the plant. Incitec Pivot Fertilisers signed a 20-year non-fixed price take or pay offtake agreement for 100% of the urea produced by the plant beginning in 2027, to supply farmers in Australia, the Asia–Pacific, and the Americas. GIP joined as an equity investor with a $1.7 billion USD equity investment. The project was expected to improve the food security of Australia and the Asia-Pacific region, for up to 90 million people. This was the largest investment ever made in the Australia fertilizer industry. The project was expected to convert Australia from being a net importer to a net exporter of urea. The project was located in one of the world's largest concentration of Aboriginal rock art, which was required to be protected. Saipem Clough Joint Venture (SCJV), a 50:50 joint venture between Saipem Australia Pty Ltd and Clough Projects Australia Pty Ltd., served as the exclusive Engineering, Procurement, and Construction (EPC) contractor for the development of the plant under a fixed-price lump sum contract. In August 2023, SCJW awarded a bulk earthworks contract Decmil Group Limited for the project. thyssenkrupp Fertilizer Technology GmbH signed a contract to prove fertilizer technology equipment for the plant, including two granulators and two exahust air scrubbers. Topsoe and Snamprogetti provided technology for the plant. Construction was expected to begin in mid-2023. The EPC contract was expected to be completed by mid-2027 after which Perdaman Chemicals and Fertilizers Pty Ltd would take responsibility of the plant. On May 3, 2023, an inaugural groundbreaking ceremony was held. In May 2024, Mubadala Investment Company invested in the plant.