Surging jet fuel prices, caused by the continued blockage of the Strait of Hormuz, sealed the fate of one embattled airline. Other airlines worldwide are slashing flight schedules in anticipation of a major jet fuel shortage. UK and South Africa-based fund manager Ninety One arranged a $142.9 million debt package for Doha-based Green Sky Capital, which is building a facility to manufacture sustainable jet fuel alternatives in Egypt.
Two of Ninety One’s funds backed the project: the Emerging Africa and Asia Infrastructure Fund, which offered a $40 million senior secured loan, and the Emerging Markets Transition Debt Fund. Qatar National Bank’s Egyptian subsidiary and The Arab Energy Fund also participated. Green Sky’s plant in Egypt will have the capacity to produce more than 220,000 tons of sustainable jet fuel and other biofuels, including bio-propane, per year.
Project security
Airlines have been some of the biggest investors in sustainable jetfuels, but capital for such fuel alternatives has otherwise been sluggish and costs of production remain high. The sector may have become more competitive with traditional fuel prices, which have roughly doubled since the Iran war began.
Green Sky has risk protection on its planned $212.4 million plant: It signed on Shell, the UK-based oil giant, as its primary feedstock provider and fuel off-taker. Shell will pay Green Sky a fee if it doesn’t purchase the fuel at an agreed-upon price.
