One of Egypt’s biggest PPPs comes online this year
How Qalaa’s ERC is the right way to do PPP: The Egyptian Refining Company (ERC)— a major public private partnership (PPP) megaproject led by Qalaa Holdings — is scheduled to come online later this year. The USD 4.3 bn facility, which is capable of producing 4.7 mn tonnes of refined oil products and derivatives per year, is also Africa’s largest public-private infrastructure project. When Qalaa Holdings closed financing on the plant in 2012, it set a record for equity raised in MENA. The project presents a prime example of how PPP projects can work and be effective. Our friend Ahmed Heikal, chairman and founder of Qalaa, explains why in a piece for the World Economic Forum’s blog ahead of the forum’s annual meeting tomorrow in Davos.
From the ground up with the right financing and tech: One of the fundamental aspects of ERC successfully getting off the ground was the broad network of financers. Qalaa called on a spectrum of private and public stakeholders and crafted an innovative PPP agreement: “a blended financing solution that includes direct foreign investment, export credit agencies and sovereign wealth funds, in addition to government and private-sector support.” This innovation extends to the technology involved in the project and the creative solutions that engineers, workers, and managers have responded with. Getting a Korean 1,280 tonne hydrocracker unit (HCU), the largest piece of equipment ever to enter an Egyptian port, installed was just one such solution.
Sustainability was also a key concern of ERC’s designers: With a PPP, writes Heikal, “no element of an impact assessment is minimized.” ERC delivers on an array of sustainability points. By bringing together local staff with foreign engineers, managers, and designers of many nationalities, ERC produces a transfer of industry knowledge into the local market, ensuring its own continued development, Heikal says.