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Petrochemicals

We finance refineries, mining projects for potash, salts and phosphates as well as manufacturing plants to produce base chemicals, fertilisers and plastics.


Financing case Reliance Industries: A record investment for Reliance Industries, the Indian global market leader

One example of support for multiple German export companies, as well as a transaction with one of the highest Hermes covers of the last several decades is the financing of production capacity expansion in petrochemicals for the Indian firm Reliance Industries Limited (RIL).

RIL is one of the largest private companies in India. Its primary business activities are the extraction and refinement of oil along with the manufacture of petrochemical products. Petrochemical substances are used in the production of plastics, packaging (such as PET bottles and plastic containers), as well as in the manufacture of synthetic fibres such as polyester and other petrochemical intermediary and finished products. In many of these areas, RIL is already a global market leader.


Largest refinery in the world

Plans for expanding production capacity are very comprehensive: Petrochemical production capacity is to be expanded at four locations, including the RIL mega refinery in the Jamnagar special economic zone in the western state of Gujarat. This enormous industrial complex is the world’s largest refinery.

A syndicated loan from nine international banks will finance supplies delivered by about 40 German exporters, with a transaction volume of up to EUR 1.6 billion. The transaction includes one of the largest export credit guarantees in recent years extended by the Federal Republic of Germany for a private buyer. Part of the financing will also be drawn from the ERP Export Financing Programme of KfW.


A special challenge

In contrast to conventional export financing arrangements, only a few of the envisioned supply contracts were already in place in this case. Together with Euler Hermes and the federal departments responsible for export credit guarantee decisions, a structure was created whereby export orders that were already signed as well as future orders could both be financed. This allowed an obligatory foundation for financing to be put in place for the future right away, which also offers German suppliers planning security going forward.


RIL financing at a glance:

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Project profile
  • Investment volume: USD 12 billion
  • Syndicate financing: USD 2 billion
  • Tenor: 13 years
KfW IPEX-Bank's contribution
  • Transaction structuring
  • Mandated lead arranger
  • Hermes agent
  • Administration of ERP Export Financing Programme