Braskem, Idesa seek finance for Ethylene XXI

11-Nov-09

Braskem and Idesa, the two partners in Ethylene XXI project are seeking finance for a planned US$2.5 bln venture. Braskem and Idesa have also held conversations with export-import banks, primarily those in the US, as well as Mexican and Brazilian development banks Nafin and BNDES. They also have plans to speak to commercial banks about financing options. Sao Paulo-based Braskem hopes to attain financing for the project by the second-half of next year. Braskem will finance 70% of the project with debt, while the balance will be funded by cash on hand from the companies' own capital. To be built in Veracruz state, capacity will include a 1 mln tpa ethylene cracker and three integrated polymerization units to produce 450,000 tpa of high-density polyethylene, 350,000 tpa of linear low-density polyethylene and 200,000 tpa of low-density polyethylene. The project is subject to Braskem board approval by December 2010. Engineering for the project would begin in 2011 following the closure of financing with the goal of starting operations in 2015. Engineering will account for some 7% of the US$2.5bn investment figure. Construction will last three years, each of which will constitute 30% of the total investment. Braskem and Idesa hope to have a preliminary financial structure in place within six months. Large multilateral organizations, particularly the International Finance Corporation (IFC) and the Inter-American Development Bank (IDB), have made contact to express initial interest.