Friday, September 29, 2023

Allen & Overy, Linklaters advise on INEOS’ €3.5bn financing

Allen & Overy has advised the pool of 21 banks and export credit agencies on the €3.5 billion financing of INEOS, represented by Linklaters, for the construction and operation of the most environmentally sustainable cracker in Europe


INEOS Olefins Belgium has announced that it has raised €3.5 billion to support the construction and operation of the most environmentally sustainable cracker in Europe.

This is the largest investment in the European chemical sector for a generation. The plant will have the lowest carbon footprint in Europe, three times lower than the average European steam cracker, and less than half that of the 10% best performers in Europe.   

The plant also has the capability of operating entirely with low carbon hydrogen as well as room for a carbon capture facility and future electric furnaces. 

Jason Meers, CFO INEOS Project ONE sais “Project ONE is a game changer for Europe. It will bring new opportunities to the chemical cluster in Antwerp as well as strengthen the resilience of the whole of the European chemical sector.”

Supported by 21 commercial banks, the deal validates the strong commercial rationale of the project and its leading environmental characteristics. The debt will be drawn in stages to support the spend profile of the project through to completion. 

It comprises €1.5 billion of uncovered debt, €1.2 billion of covered facilities from export credit agencies UKEF, Cesce and SACE; and an €800 million covered tranche of which up to €500 million is guaranteed by Gigarant (a vehicle of the Flemish Government that provides loan guarantees).   

The cracker will produce ethylene, which is a vital raw material for a wide range of products essential to our daily lives, from insulation, to lightweight vehicles, plastics for medical, healthcare and food hygiene, as well as technology for renewable energy.

Twenty-one commercial banks and export credit agencies from the UK (UKEF), Spain (Cesce) and Italy (SACE) participated in this cross-border transaction in which teams from the firm´s London, Belgium, Luxembourg and Madrid offices have been involved.

The Allen & Overy London office team leading the transaction was formed by partner Lorraine Bayliss, and associates Mark Masson and Peter Rowley.

The Allen & Overy Spain team comprised partner Jimena Urretavizcaya, associate Marina Jiménez López and trainee Juan Gómez Carús.

A Linklaters cross-practice and multijurisdictional team advised INEOS. The construction aspects of the project were led by Energy & Infrastructure partners Andrew Penfold, Richard Coar and managing associates Harith Canna and Shoneez Rugan (all London) and advice on Belgian law and land arrangements were led by partners Pieter Puelinckx and Lieve Swartenbroux and managing associate Lothar Van Driessche (all Brussels). The project financing was led by partners Matthew Keats and Ilia Ditiatev, assisted by Kwaku Osei, Izi Peplinski and Carina Chan.

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