21/03/2018

Press release: TOAZ gets financing to prepare for the construction of its third urea production unit

Togliattiazot signed a loan agreement with a consortium of the banks Commerzbank AG (Zurich, Switzerland) and Landesbank Baden-Wuerttemberg (Stuttgart, Germany) of EUR 180 million for a period of 9 years. The interests are payable after a two-years grace period, at a rate of ca. 2% p.a.. The agreement shall be backed by Swiss Export Risk Insurance (SERV).

The borrowings are intended to finance the design of the third urea production unit with a capacity of 2,200 metric tons per day at PJSC TOAZ site and supplies of equipment and technologies for its construction. The unit is more cost effective and efficient than its existing equivalents.

An independent audit was conducted as a part of preparations for receiving the loan. The audit confirmed Togliattiazot’s compliance with the requirements of the International Financial Corporation (IFC, a member of the World Bank Group), including in the areas of environmental and occupational safety, and social policy.

Petr Ordzhonikidze, Chairman of the Board of Directors of PJSC Togliattiazot, commented on the agreement: “It is for the first time in its history that Togliattiazot gets such complex financing, so the entire process required thorough and concerted efforts of the financial and economic department and many other services of the company. Indeed, we appreciate the duration and interest rate of this loan, which are now the new benchmark for Togliattiazot. The decision by reputable international financial organisations to support TOAZ’s project is a quality mark, a confirmation that our strategy is correct and a display of confidence in its success.”

The new unit design was developed in collaboration with Casale S.A. (Lugano, Switzerland). After the commissioning the unit will allow TOAZ to increase the share of ammonia processed into a product with a higher added value, create about 100 new jobs and make additional payments to budgets of all levels. The unit was designed using the latest industrial and environmental safety technologies to ensure a substantial decrease in air emissions when providing a urea purity degree of 93%. To date, the project has successfully passed the public hearings and state expertise and received a construction permit. The unit is expected to be commissioned in 2020.

Togliattiazot currently operates two urea units, each producing 480,000 tonnes yearly.

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