Algerian Electricity and Gas Company. Sonelgaz Group Projects funding. Summary. Introduction Strategic choice of funding of the Sonelgaz Group The financial arrangements used in the Sonelgaz Group Comparison between methods of financing Challenges. 1. Introduction.
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AlgerianElectricity and GasCompany
Sonelgaz Group Projectsfunding
In order to cover financially its development programs, the Sonelgaz Group, in search of financial resources, as a consolidated entity, to enable it to ensure the development of its infrastructure has initiated a major capital raising on the banking and financial market in accordance with national regulations
Moreover, as a public company involved heavily in the development area, the Sonelgaz Group, has set a goal to be a major player in the national banking and financial market. With this in mind, the Group has used various mode of financing regarded as a lever for development.
To do this, the Group Sonelgaz studied the different funding opportunities and has achieved the establishment of conventional funding arranged locally in the short,medium and long term as well as the use of the bond.
The Group, since 2006, also pledged a new funding formula that is the finance project for new investments in electricity production in partnership, through HadjretEnnous projects « SKH » wilaya de CherchellKoudietEddraouch "SKD" wilayad’ElTarf and Terga"SKT" in the wilaya of Ain Temouchent
The Group Sonelgaz, and as part of the financial coverage of its investments, characterized by the mobilization of funds for development of its activities (investment capital) on one hand, and for rural electrification programs of public gas distribution on the other hand, uses the following resources:
The legal and regulatory framework, requires the Sonelgaz Group to raise funds on the Algerian banking market, and this has been since 2006.
Indeed, the Algerian banking and financial market is considered advantageous for the development and the financial balance of Sonelgaz Group. Conditions that are offered are financial levers of growth for the Group:
It should be noted however, that arbitration in the use of resources, particularly for infrastructure projects has resulted in the deferral of some investment programs.
Contracted with Algerian national banks, these lines are granted to finance, as appropriate, apart of the operation and a part of the financing needs of structuring projects and the means of production of electricity, transmission of electricity and gas, or distribution of electricity and gas and this in order for to meet local expenditures (disbursements, benefits, advances ....) or foreign currency (foreign trade)
3.2. Bonds: Financial achievements
87,5 Billions Dinars
3.2. Bonds: Physicalrealizations
3.3. The Finance project
The Project Finance is a financing method based on the ability of a project to generate sufficient revenue to:
It is mainly characterized by :
3.3.the finance Project –Design and structure
Bank leader *
(*): the bank leader actsas securityagent, manager and account manager .
Agreement related to accounts
Undertaken primarily by companies with sufficient funds
Action of the Board on behalf of the shareholder in terms of monitoring
Affiliation to management control (governors)
Cash flow obeys the company policy
The Finance Project
Can beundertaken by a corporation / partnership.
The necessary capital and cash flows are isolated from other activities of investors.
Contractual arrangements have commitments that impose control
Cash flow obeys distributed to shareholders
Financing time Settingshort
Reinvestment of fundsgenerated
Financing arrangements very long and highlystructured
Relativelyhighcosts of arrangement
Debt service provided by all fund sponsors
Signing a loan agreement by programme
Debt service provided by cash flowsgenerated
Design of loancontractsbased on specificcharacteristics of the project
Direction Exécutive de la Stratégie Financière et de la Consolidation
Direction des Opérations Financières et Engagements
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