A&O Shearman has advised the lenders and a cover provider on the USD1.150bn project financing for the development, construction, commissioning, operation, and maintenance of a state-of-the-art greenfield polypropylene production facility in the Province of Adana, Republic of Türkiye.
The project is a joint venture between Rönesans Holding A.S, a leading Turkish contracting and investment company, and Sonatrach Petroleum Investment Corporation B.V, a subsidiary of Algeria's state-owned national oil and gas company, Sonatrach S.p.A. The facility will feature a propane dehydrogenation unit, a polypropylene unit, and associated utilities, with a nameplate capacity of 472,500 MT per annum of homo-polypropylene. Notably, the facility will utilize 100% renewable electricity and internally generated hydrogen as fuel, significantly reducing its environmental footprint.
Once operational, the facility is expected to reduce CO2 emissions by 72% compared to conventional polypropylene production methods using natural gas and other traditional power sources. The project aims to substitute polypropylene imports with domestic production, thereby reducing Türkiye's polymer trade deficit. Additionally, it will create qualified employment opportunities, facilitate knowledge transfer, introduce a new value-adding industrial activity into the economy, and bolster Türkiye's polymers processing segment. This initiative positions Türkiye as a potential global hub for petrochemicals production.
The A&O Shearman deal team was led by London partner Lorraine Bayliss, with support from counsel Eleanor Milne, senior associates Chinedu Ihenetu-Geoffrey and Saskia Volhard-Martin, and associates Lucie Prego and Patricia Kongoasa.
Further specialist advice was provided by Matthew Townsend (partner), Maura Rezendes (partner), and Ming He (associate).
Umut Gurgey (partner) (from Gedik & Eraksoy) provided Turkish law advice on the transaction, with support from Dilsah Gurses (senior associate) and Melis Yilmaz (associate).
"We are delighted to have supported Ceyhan Polipropilen Üretim Anonim Şirketi on attaining this important milestone on this transaction. The transaction is very strategic for Turkey and a good example of how existing technologies can make very valuable contributions to energy transition given the reduced Co2 emissions when compared to alternative existing projects (as well as the emissions reduction from reducing Turkey's need to import polypropylene)"