Narrative
Full Description
Project narrative
In June 2014, the Chinese Government issued a buyer's credit loan for the Sadaf Petrochemical Project. The face value and the borrowing terms of the loan are unknown. The loan that supported this project was likely drawn from the line of credit captured in Record ID#41274. The loan proceeds were to be used by the borrower to finance an EPC contract worth EUR 800 million that was signed by Lordegan Petrochemical Company (LPC) and a consortium consisting of HuaFu Engineering Co. (HFEC) and the Aviation Industry Corporation of China (AVIC). The purpose of the project is to construct a petrochemical plant capable of producing 136,000 tons of Emulsion Styrene Butadiene Rubber (ESBR). The plant is being built on 8.1 hectares of land in the Pars Special Economic Energy Zone (PSEEZ) within the port city of Assaluyeh in Bushehr Province. It is adjacent to Entekhab Petrochemical Plant to the north, Jam Petrochemical Company to the south, Petrochemical Road to the east, and land owned by Styrene Park to the west. HFEC and AVIC were the EPC contractor responsible for project implementation. A formal groundbreaking ceremony took place on or around October 15, 2015. The project had achieved a 37% completion rate as of November 2017. Then, in December 2018, it was announced that the project was expected to reach completion in 2020. According to an update released in February 2022, the project had a new expected completion date of March 2023.
Staff comments
1. The Persian project title is شرکت شيميايي صدف عسلويه or پتروشیمی صدف عسلویه. 2. The borrower institution is unknown. However, according to a BBC report, the credit line (captured via Record ID#41274) issued by China for petrochemical projects was planned to be finalized with Iran's Central Bank, so AidData has identified the Central Bank of Iran as the receiving agency (borrowing institution) for the time being. The borrowing institution may have been Sadaf Petrochemical Company (SPC or شرکت شيميايي صدف عسلويه). This issue merits further investigation. 3. The specific financier of this project is unknown. However, around the time that the project was financed, China reportedly owed Iran over $20 billion in oil payments. This funding was frozen in overseas banks after US-led sanctions made it difficult for Beijing to transfer money to Tehran. Iran and China reportedly reached a deal to settle some parts of the frozen money through China’s funding of Iranian petrochemical projects. Also, in 2017, a Vice President of China Eximbank reported that it had financed 26 electricity, petrochemical, oil and gas and nonferrous metal projects in Iran worth $9 billion. Therefore, China Eximbank is the most likely funder of this project. 4. For the time being, AidData assumes that the face value of the buyer's credit loan was equivalent to 85% of the total cost of the EPC contract (EUR 680 million). 5. Lordegan Petrochemical Company is a subsidiary of the Iranian Investment Petrochemical Group, which is a Public Limited Company that was founded in 2011 in Tehran. According to the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the Iranian Investment Petrochemical Group is owned or controlled by Iran’s largest and most profitable petrochemical holding group, Persian Gulf Petrochemical Industries Company (PGPIC), which was sanctioned in June 2019 for providing financial support to Khatam al-Anbiya Construction Headquarters (Khatam al-Anbiya), the engineering conglomerate of the Islamic Revolutionary Guard Corps (IRGC).