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Overview

Chinese Government provides $375 million loan for Bushehr Petrochemical Plant Construction Project (Linked to Record ID#41429)

Commitments (Constant USD, 2023)$512,776,590
Commitment Year•2014Country of Activity•IranDirect Recipient Country of Incorporation•IranSector•EnergyFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2014
End (actual)
Aug 24, 2020

Geospatial footprint

Map overview

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The purpose of this project was to construct a petrochemical plant — with the capacity to produce nearly four million tons per annum, including 1.65 million tons of methanol, 1 million tons of olefins, 550,000 tons of ethylene glycol, 300,000 tons of light and heavy polymers and 300,000 tons of acetic acid — on a 70 hectare site in the Pars Special Economic Energy Zone (PSEEZ) within the port city of Assaluyeh in Bushehr Province. More detailed locational information can be found at https://www.openstreetmap.org/way/769807843.

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

State-owned companies

  • Bushehr Petrochemical Company

Loan desecription

Chinese Government provides $375 million loan for Bushehr Petrochemical Plant Construction Project

Interest type•Unknown

Narrative

Full Description

Project narrative

In 2014, the Chinese Government issued a $500 million loan for the Bushehr Petrochemical Plant Construction Project. The loan that supported this project was likely drawn from the line of credit captured in Record ID#41429. The loan proceeds were to be used by the borrower to finance an EPC contract with an unidentified firm. The purpose of this project was to construct a petrochemical plant — with the capacity to produce nearly four million tons per annum, including 1.65 million tons of methanol, 1 million tons of olefins, 550,000 tons of ethylene glycol, 300,000 tons of light and heavy polymers and 300,000 tons of acetic acid — on a 70 hectare site in the Pars Special Economic Energy Zone (PSEEZ) within the port city of Assaluyeh in Bushehr Province. As of March 2017, the project had achieved a 40.8% completion rate. The plant became operational on August 24, 2020.

Staff comments

1. The Persian project title is پتروشیمی بوشهر - سایت or شرکت پتروشيمي بوشهر. 2. The borrower of the loan that supported this project is unknown, but it may have been Bushehr Petrochemical Company. This issue merits further investigation. 3. The financier of this project is also unknown. However, around the time that this 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 (see "China’s EXIM Inks $1.5 bn High-Speed Rail Deal with Iran") 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.