CDB provides $607 million buyer's credit loan for Phase II of Shymkent Oil Refinery Reconstruction and Modernization Project (Linked to Record ID#72399)

Project narrative

On June 9, 2017, China Development Bank (CDB) signed a $607 million buyer's credit (facility) loan agreement with the Development Bank of Kazakhstan JSC (DBK) for Phase 2 of the Reconstruction and Modernization of the Shymkent Oil Refinery. DBK then used the proceeds from the CDB loan to on-lend to a project company (special purpose vehicle) called PetroKazakhstan Oil Products LLP (PKOP). The CDB loan facility had a maturity date of April 25, 2030 and carried an interest of rate of 2.7% per annum plus LIBOR. In September 2017 and December 2017, DBK drew down two tranches of $100 million each. Then, in June 2018, DBK drew down a further $65 million, and in May 2020, DBK drew down a further $130 million tranche under the facility agreement. The aggregate principal amount outstanding under the facility agreement was $0 as of June 30, 2017, $386 million as of December 31, 2020, and $368.1 million as of December 31, 2021 PKOP also contributed some of its own funds to support the implementation of the project. Additionally, a Sinosure-backed bank syndicate of Calyon, Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi UFJ, and Deutsche Bank provided additional financing to support the project. The syndicate provided $225 million USD to DBK for on-lending, while Sinosure provided export buyer’s credit insurance. The Export-Import Bank of China pledged $1 billion for the first phase of the modernization of the refinery as captured by linked Record ID#72399. The project sought to increase annual production from 5.25 million to 6 million tons and improve refining levels. After the modernization (including Phase I, the plant was to be more environmentally friendly and able to produce Euro-4 and Euro-5 products. The project also included the construction of a complex of catalytic cracking units with a capacity of 2 million tons a year, an alkali treatment unit, a amine recovery unit, a sour water stripper, a pressure swing absorption unit, a unsaturated LPG desulfurization unit, a saturated LPG desulfurization unit, a sulfur production unit, and a revamping of the CDU of LK-6U complex. China Petroleum Engineering and Construction Corporation (CPEEC) was the general contractor responsible for project implementation. Phase II was completed on August 15, 2018.