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Last updated at: (Beijing Time) Saturday, March 22, 2003

Massive Investment in Sino-German Petrochemical Project

An agreement has been signed to raise 1.4 billion US dollars for a giant Sino-German petrochemical project in Nanjing, capital of east China's Jiangsu province.


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An agreement has been signed to raise 1.4 billion US dollars for a giant Sino-German petrochemical project in Nanjing, capital of east China's Jiangsu province.

The Yangtze Petrochem-BASF integrated petrochemical site (IPS) project, costing a total 2.9 billion dollars, is a joint venture involving German chemical giant BASF, China's leading petrochemical producer, Sinopec, and the Yangtze Petrochemical Company in Nanjing. Yangtze Petrochem-BASF Co Ltd is a 50:50 joint venture between Sinopec and BASF.

Construction on the project, which started in December 2000, is expected to be completed in 2004 and the project is due to be put into commercial operation in 2005.

The project is expected to produce 600,000 tons of ethylene annually and 1.7 million tons of other petrochemical products.

The huge investment was raised by the founding companies from six Chinese and overseas banks by the means of the limited recourse finance. This means that the companies will provide guarantees for the loans during construction, and when the projectis completed, the banks will take over the guarantee responsibility.

It is the largest sum ever raised this way for a Chinese petrochemical project and for the German company as well.

The loans are granted by the Industrial and Commercial Bank of China, the Agricultural Bank of China, the China Construction Bank,the Bank of China, the Bank of Communications, and Citibank.


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