Kuwait Petroleum Borrowing $10 Billion This Month for Refineries

Updated on
  • Refineries being upgraded to meet fuel demand in nation
  • Nation targets 15 percent of energy from renewables by 2030

Kuwait Petroleum Corp. expects to arrange a $10 billion loan to expand refineries to produce cleaner burning fuel.

The loan is expected by the end of this month, Nizar Al-Adsani, chief executive officer of the state-run company, told reporters in Abu Dhabi Tuesday. He didn’t say which banks are involved. The refineries will produce fuel that produces less pollution than diesel and gasoline currently made in Kuwait.

KPC is expanding its use of renewable energy even though the technology isn’t economical for the time being because of subsidies in the nation, the CEO said. Kuwait will show “some action” early this year in cutting fuel and power subsidies, he said. Bahrain, Oman and the United Arab Emirates have already cut some subsidies.

Kuwait is evaluating subsidy policy as one option to reduce the government deficit, and has no firm plans to cut subsidies, Kuna reported after Adsani spoke, citing KPC spokesman Talal Khaled.

Kuwait wants 15 percent of its total energy production to come from renewable energy by 2030, Adsani said. KPC is investing in solar panels and “energy efficiencies” to help meet the target, he said.

Kuwait is upgrading two of its three refineries to produce clean fuel while planning to shut the third, its smallest, next year. The nation will again have three refineries by 2019, with the opening of the Al Zour refinery.