Citadel lines up Libyan gas contract, dairy loan

Citadel portfolio company TAQA Arabia has won a $165m gas distribution contract in Libya, while Dina Farms, an Egyptian dairy backed by the firm, has successfully secured $36m in debt financing.

Cairo-based Citadel Capital's portfolio company TAQA Arabia has won a lucrative gas infrastructure contract.

Libya awarded the company a $165 million contract to build the infrastructure for a gas distribution network linking 370,000 households across the country’s three major cities of Tripoli, Benghazi and Misurata.

It marks a first in the country for TAQA, which already holds gas distribution contracts across Egypt, Qatar, the United Arab Emirates, Syria and Jordan. Citadel invested $84.3 million of equity into TAQA in June 2006 as part of a regional industry roll-up investment strategy, according to a summary of Citadel’s portfolio.

This contract will be the launching pad for more Libyan projects.

Marwan Elaraby

The contract hints of an increasing role for the private sector in Libya, which has had no private sector investments in infrastructure reach financial close between 1990 and 2007. “We believe that this contract will be the launching pad for more Libyan projects for TAQA,” Citadel managing director Marwan Elaraby said in a statement.

The firm also plans to make a big push into the Iraqi oil and gas sector, according to remarks made by Ahmed Heikal, the firm’s chairman and founder, at PEI Media’s Emerging Markets Private Equity Forum in New York in March.

In related news, Citadel-backed Dina for Agricultural Investments (Dina Farms) has secured an EGP200 million ($36 million; €26 million) loan from Egyptian banks Ahly United Bank, Egyptian Arab Land Bank and United Bank. Ahly United Bank was the lead arranger on the four-year loan.

Citadel said Dina Farms' annual production capacity is set to reach 46,000 tons of milk this year, up from 36,000 tons in 2008, making it the largest producer of fresh milk in Egypt.

Yvette Choo contributed to this report.