Clifford Chance advises lenders on MENA region’s first sustainable aviation fuel (SAF) plant in Egypt

Global law firm Clifford Chance has advised the lenders on the financing of Egypt’s first sustainable aviation fuel (SAF) production facility. The project marks the development of the first project-financed SAF plant in Africa and the Middle East. The US$212.4 million project is supported by a US$142.9 million debt package provided by The Arab Energy Fund (TAEF), Qatar National Bank (QNB) and The Emerging Africa & Asia Infrastructure Fund and Emerging Markets Transition Debt Fund, funds managed by Ninety One.

Shell will act as the plant’s primary feedstock provider and sole offtaker, pursuant to a long-term take-or-pay offtake agreement, supporting the project’s long-term commercial viability. Axens will provide its proprietary processing technology.

Located in the Sokhna Special Economic Zone in Egypt, the project is being developed with the support of sponsors Green Sky Capital Management, Al Mana Holding and Vision Invest. The facility is designed to produce 200,000 tonnes per annum of biofuels, including SAF and other green products and will utilise Hydroprocessed Esters and Fatty Acids (HEFA) technology to convert waste-based feedstock into high-grade sustainable fuel. This will contribute to global aviation decarbonisation efforts and support the growth of Egypt’s sustainable fuels industry.

Nicholas Wong, partner, commented: “For SAF to become a meaningful part of aviation’s decarbonisation efforts, projects need access to capital at scale. This financing demonstrates how we are helping to bring together the right combination of lenders and commercial arrangements to support the development of SAF infrastructure and establish a bankable model for future projects in the region. We are delighted to support our valued clients, TAEF, QNB and Ninety One, and the project sponsors, on achieving another landmark transaction in the energy transition space.”

Tom Capel, counsel, added: “SAF is still a developing market and technology so each successful project helps to build the bankability story in the market. As the first project-financed SAF facility in the region, this project sets important precedents, deepens the market’s understanding of how SAF infrastructure can be developed and financed, and builds confidence across the sector. Transactions such as this demonstrate how the right combination of stakeholders can come together and execute meaningful energy transition projects at scale and with efficiency.”

Partner Nicholas Wong and counsel Tom Capel led the Clifford Chance team, advising on all aspects of the financing, including the project’s financing structure and related feedstock supply and offtake arrangements. They were supported by senior associates Thomas Hobbs-Martin and William Holmden, and associate Jacie Lim. Partner Matt Buchanan, counsel James Thornton and associate Jeanette Lee advised on construction, procurement and technology licensing matters.

As a leading adviser on sustainable fuels and energy transition projects globally, Clifford Chance has advised on landmark SAF and green fuels transactions across Asia Pacific, Europe and Latin America. These include advising ADB and IFC on the first project financing of a private-sector SAF facility in Asia Pacific, SkyNRG on the financing of the first facility in Europe dedicated solely to SAF production, and Acelen Renewables on Brazil’s first integrated sustainable fuels project.