EBRD and BSTDB Sign Oil Agreement with Channel Energy

On March 19, 2002, the European Bank for Reconstruction and Development (EBRD) and the Black Sea Trade and Development Bank (BSTDB) signed agreements with Channel Energy (Poti) Limited-Georgia for the financing of the construction and operation of a new oil terminal to be built in the Port of Poti, Georgia, on the Black Sea. Loan proceeds will be used towards the purchase and installation of oil-handling equipment and construction of oil products storage facilities.

The value of the project is approximately US$31 million, of which US$11.6 million was provided by EBRD and US$8 million was provided by BSTDB. The project sponsor, Channel Energy (Eire) Limited, a Gibraltar company indirectly owned by Tower Holdings SA of Luxembourg, provided the remaining funding by way of equity. The financing represents a key development for Georgia and is expected to result in an efficient state-of-the-art oil products terminal. The project will effectively open the least costly export route for oil products from the Caspian Sea to the Black Sea.

Representing EBRD and BSTDB were McCarthy Tétrault LLP, as special counsel, with a team comprised of Brian Kelsall and Ella Plotkin; along with EBRD in-house counsel Tom Hammack and BSTDB in-house counsel David Drake. Julian Morgan of Morgans acted as English solicitor for the borrower.