Braskem Idesa announces financial agreement for petrochemical complex in Mexico

Braskem Idesa announces the successful signing of the principal financing documents for  the US$ 3.2 billion Project Financing that will fund the construction and operation of a major petrochemical complex, which will be the most modern in the Americas. 

This landmark financing was structured by seven official Agencies which include two Export Agencies of Canada and Italy, two Multilateral Agencies (IFC and IADB), and three Development Banks of Brazil and Mexico. Ten commercial banks will fund either under the guarantee of SACE or under B-loans of IFC and IDB. Intesa Sanpaolo acts as  Agent of the US $ 600 million SACE Facility. Distribution of funds is detailed below:

Sumitomo Mitsui Banking Corporation acted as sole Financial Advisor and White & Case served as international and Mexican Legal Counsel for Braskem Idesa.

Founded in 2010, Braskem Idesa SAPI is a joint venture, formed by the Brazilian Braskem S.A., the largest producer of thermoplastic resins in the Americas, and Grupo Idesa, a leading Mexican petrochemical company. Braskem Idesa is developing the Etileno XXI project, a petrochemical complex for the production of ethylene and polyethylene in the state of Veracruz, Mexico (Municipality of Nanchital). This project is expected to require a fixed investment of US$ 3.2 billion (CAPEX) and a total investment of approximately US$ 4.5 billion.

Once operating at its planned capacity of one million tons of high and low density polyethylene peryear, Braskem Idesa is expected to be a driver for economic growth in Mexico’s southeast region.

The site preparation and the first phase of construction that began in October 2011 have been completed. As of November of this year the second phase began, consisting of detailed engineering, equipment procurement and civil and electromechanical construction which is expected to be concluded in the first half of 2015.

Located in a strategic area with high potential for new oil and gas reserves, Braskem Idesa’s complex is expected to impact the Mexican balance of payments by replacing US$ 1.5 to US$ 2 billion of polyethylene imports used in various commercial and industrial transformation processes.