Bank of China pledges $1 billion loan for Phase 1 of the Etana Polymer Industrial Plant Construction Project

On January 30, 2018, the Bank of China was announced to be providing a $1 billion loan to Vnesheconombank (VEB) for Phase 1 of the Etana Polymer Industrial Plant Construction Project. The loan type and borrowing terms are unknown. According to documents from the Government of Kabardino-Balkaria (KBR)'s investment portal, the total project cost for Phase 1 is RUB 985.2 million. A 2020 document says that as of December 31, 2020, the Russia Ministry of Finance, VEB, and China Eximbanks were currently "working on the financial structuring of the ETANA PET I project" (p. 5). The Etana Industrial Complex, located in the Maisky district of Kabardino-Balkaria (KBR), is separated into five parts. The main feature is a polyethylene terephthalate (PETF/or PET, the material mainly used to produce plastic bottles) plant called ETANA PET 1 with a 1.5 million ton capacity per year. The other parts will house containers for export, packaging centers, and other facilities. The complex will be designed to produce 5 billion liters of water per year until 2030. Works will be constructed in three phases. As of January 2018, the total project cost for all three phases was at least USD 12 billion until 2030. On January 16, 2016, China Petroleum Technology & Development Corporation (CPTDC) and China Kunlun Contracting and Engineering Corporation (CKCEC), with support from the National Energy Administration of China, signed an EPC contract with the Government of Russia for the contraction of a polyethylene terephthalate (PET) plant in the Maisky district. In November 2016, Kabardino-Balkaria and CKCEC signed a general cooperation agreement regarding the PET plant as well as containers for exporting mineral water. In July 2017, during the creation of Etana Industrial Complex LLC (a special purpose vehicle), a sustainable development agreement was signed, providing for long-term cooperation between the KBR government and leading companies in Russia and China.. Phase 1 implementation reportedly began on schedule in 2018. Phase 2 was supposed to take place in 2019 and Phase 3 in 2020. However, an RCC media report from November 2018 stated that construction on the project would begin in 2019. The Russian Minister of Infrastructure said that the basic designs for Phase 1 were complete, an investment application had been prepared, and the EPC contract price had been determined. According to a 2018 document from the Government of Kabardino-Balkaria (KBR)'s investment portal, works were going be launched in 2021 (p. 9).

Additional details

1. This project is also called the Ethan Pure Polymer Plant or ETANA PET 1 complex or Etana Industrial Cluster. The Russian project title is Создание в КабардиноБалкарской Республике промышленного комплекса «Этана» or промышленного кластера "Этана." The Chinese project titles are 埃塔纳T和纤维项目 or 埃塔纳塑料厂 or 第一个埃塔纳群 or 埃塔纳PET项目. 2. Google-translated sources suggest that China Eximbank was joined by other unspecified Chinese banks but that is not confirmed. 3. One media source submit that two subsidiaries of CNPC (China Petroleum Technology & Development Corporation (CPTDC) and China Kunlun Contracting and Engineering Corporation (CKCE)) will also play some part in the funding of this project. However, they appear to merely be implementing the project, as on January 16, 2016, they signed an EPC-Contract for the construction of a polymer Complex ETANA PET.

Number of official sources

6

Number of total sources

12