THE ECHO - Ferrostaal

50
financing
PLANT FINANCING IN CHILE
A MODEL FOR SOUTH AMERICA
Six years ago, MAN Ferrostaal negotiated a contract with the Chilean company EMPRESA NACIONAL DE PETROLEO (ENAP) for the
turnkey delivery of a diisopropyl ether plant. The project was the first in a series of joint projects with unusual financing concepts.
The financing of the latest project, a delayed coker, was awarded the title of most important project-based financial operation of
the year 2005 in Latin America by the internationally renowned financing magazine “Project Finance International”.
When the state-owned Chilean oil company
ENAP made plans for the construction of a
diisopropyl ether (DIPE) plant in 2000, it
was looking for a general contractor willing
to provide long-term investment and capable
of implementing a very challenging
financing concept. Edzard zu Knyphausen,
Managing Director of MAN Ferrostaal
Chile, describes the initial situation: “Right
after our initial discussions, ENAP and
MAN Ferrostaal agreed that there was
potential for further joint projects. The
financing structure of the DIPE project did
not fit into any of the usual financing categories
of Project Finance or Corporate
Finance. On the one hand, private financing
was to be part of the investment but,
on the other the state-owned ENAP wanted
to retain full operational and entrepreneurial
control.”
In order to secure long-term financing,
ENAP, MAN Ferrostaal and other partners
founded a project company acting as
owner, borrower and operator of the plant.
After the successful realization of the project
and financing concept, the DIPE plant
was completed on schedule in September
2003. Soon there were additional contracts
following the same pattern: two desul-
phurization plants (2002), one mild hydrocracker
(2004) and, in 2005, the contract
for a delayed coker, a refinery plant for the
conversion of very heavy hydrocarbon
molecules into lighter products.
LONG-TERM PARTNERSHIP
The contracts between ENAP and MAN
Ferrostaal in a consortium with the Spanish
partners Foster Wheeler Iberia S.A. and
Técnicas Reunidas S.A. and ENAP for the
turnkey delivery of a delayed coker including
utility systems were signed and put into
effect in July 2005.
Similar to the earlier projects, these not
only cover the delivery of a plant, but also
the implementation of a complete project
and financing concept, including a longterm
share in equity of the established
project company, which is to run for 20
years. This project company acts as owner,
operator and borrower and provides the
end customer ENAP with the production
capacity of the plant as part of a financial
lease concept.
The structure of all ENAP contracts follows
this concept. While the total investment
volume of the DIPE project was still less than
30 million US dollars, the investment for the
construction of the mild hydrocracker