THE ECHO - Ferrostaal

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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
exceeded 100 million US dollars. For the construction of the delayed coker, the partners developed a financing concept for an investment volume of 430 million US dollars. Financing packages for the mild hydro cracker and the delayed coker, amounting to over 540 million dollars in total, were arranged and internationally syndicated in New York. Both financing concepts were well oversubscribed, which proves the attractiveness of the business model and Chile as a location of industry and commerce. In 2005, the financing of the delayed coker was given the title “Latin America Deal of the Year 2005” by the internationally renowned financing magazine “Project Finance International”. The project was seen as “the most important projectrelated financial operation of the year 2005 in Latin America”. 49% ENAP Group TASK FORCE IN MADRID Process licensor for the delayed coker is Foster Wheeler, a well-known plant constructor from the USA. Foster Wheeler Iberia, Madrid, and Técnicas Reunidas, Madrid, are responsible for the full engineering. The equipment is delivered by Foster Wheeler, Técnicas Reunidas and MAN Ferrostaal. For this reason, a temporary project company (Union Temporal de Empresas) was established in Spain, with MAN Ferrostaal owning a stake of one third. This company executes the non-Chilean part of the contract from its Madrid location. A task force was established at Foster Wheeler Madrid into which the MAN Ferrostaal project team was also delegated. The project management as well as all purchasing of equipment will be executed from there. CAPITAL OWNED – INVESTORS 51% MAN Ferrostaal 17% Foster Wheeler Iberia 17% Técnicas Reunidas 17% PROCESSING SERVICES CONTRACT ENAP Refineria Aconcagua OPERATION AND MAINTENANCE CONTRACT ENAP Refineria Aconcagua LEASING CONTRACT ENAP Refineria Aconcagua FINANCING ENERCON S.A. PROJECT COMPANY THE ECHO 1/2006 51 For the local tasks in Chile, the consortium partners established a joint venture in Santiago de Chile. The Chilean subsidiary of MAN Ferrostaal, DSD Chile, is responsible for the construction and assembly of the complete plant. Helmut Mühlemeier PLANT DELIVERY CONTRACT (TURNKEY) Consortium Foster Wheeler, Técnicas Reunidas, MAN Ferrostaal CAPITAL BORROWED Credit international Banking syndicate
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Page 8 and 9: 8 forum 01 02 01. Turbines and comp
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Page 58 and 59: 58 news >ESSEN: STUDENTS MEET DR. M
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