PETROCHEMICALS I

closed

The project would form the core of the third petrochemical complex around which industries producing intermediate and some of the final products would be established. The project consists of a raw materials plant with a production capacity of about 1,250,000 tons per year of ethylene, propylene, butadiene, benzene and other petroleum derivatives and a utilities plant consisting of (i) steam production facilities; (ii) water treatment facilties to treat and demineralize water for utility and process requirements; and (iii) power generation facilities for critical operations that cannot tolerate power interruptions. The petrochemical complex would substantially reduce Brazil's need to import petrochemicals and produce net annual foreign exchange savings of about US$510 million (at 1977 prices) by 1985. It would also help to diversify industry away from the main industrialized areas of Sao Paulo and Rio de Janeiro. The project faces some risks but government pricing policies and involvement in selecting suitable sponsors for the downstream units coupled with Bank and IFC involvement in the preparation and financing of these units would reduce the risks to acceptable levels.