Kuwait National Petroleum signs $3.98bn loan for Clean Fuels Project

State-owned refiner Kuwait National Petroleum Co (KNPC) in the Middle East has signed the first tranche of a loan worth $3.98bn for its Clean Fuels Project.

Led by National Bank of Kuwait (NBK) and Kuwait Finance House, the tranche for ten years will be provided by the local banks.

The pricing details of the tranche have not yet been given.

Last month, the KNPC chief executive Mohammed Al-Mutairi stated that the first tranche would amount to $2.98bn, though the reason for the current increase in its size has not been disclosed.

The second tranche, which is expected to be worth $6bn, is slated to close late this year and will be provided by international lenders.

The two tranches of the loan would account for 70% of the total funding needed for the fuels project, while the remaining 30% of the funding will be provided from KNPC’s own funds.

NBK’s chief executive said that the bank provided $1.32bn as its share of the $3.98bn tranche, while Kuwait Finance House’s share was worth nearly $910m.

There were other 11 banks, including five Islamic lenders, who took part in the first tranche.

The scope of the project, which is part of Kuwait’s $99.3bn economic development plan, includes the modernisation and expansion of two of the Middle East country’s largest refineries.

This upgrade will focus on the production of higher-value products, such as kerosene and diesel for export.

Another Clean Fuel Project of Kuwait Petroleum Corporation (KPC) is already half its way through and is expected to be completed in 2018.