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Preem signs new loan agreement of circa 2.8 billion SEK

As part of its strategy to transition towards large-scale renewable fuel production, Preem enter into a loan agreement totaling approximately 240 million euros, equivalent to around 2.8 billion SEK, with the Swedish Export Credit Corporation and Crédit Agricole Corporate & Investment Bank. This loan falls under the National Debt Office's “green credit guarantees” program.

This is the second credit guarantee issued by the Swedish National Debt Office to Preem under the government's credit guarantee program for green investments. The loan guarantee is intended to fund Preem's ambitious investment at the Lysekil refinery for the production of renewable diesel (HVO100) and sustainable aviation fuel (SAF). It is an investment in production that positions Preem to become the largest producer of renewable aviation fuel in Northern Europe and one of the largest producers of renewable fuels for road transportation.

- Preem is executing the most significant transformation in the company's history, with a series of pivotal projects ongoing at our refineries aimed at achieving carbon neutrality. With this loan, we can ensure an expanded supply of sustainable biofuels for the aviation and transportation sectors, says Lina Stolpe, CFO of Preem.

The total cost of Preem's investment stands at around 5.4 billion SEK, with the current green loan of approximately 2.8 billion SEK providing partial financing. This loan, spanning a seven-year term, is backed by the National Debt Office through a green credit guarantee, covering 80 percent of the loan amount.

The loan is earmarked for the investment in the ICR facility at the Lysekil refinery. The reconstruction of the facility, currently producing diesel, is set to commence in 2024 and is scheduled for completion by 2027.

- The facility is expected to increase our renewable production capacity by 1.2 million cubic meters, compared to the total capacity of renewable fuels in 2023, which was approximately 530,000 cubic meters. The reconstruction is crucial for reducing fossil carbon dioxide emissions. According to our projections, emissions in end-user sectors could decrease by up to three million tons annually, explains Lina Stolpe.

- Reducing greenhouse gas emissions is one of the most critical challenges of our time. Swedish Export Credit Corporation's goal is to support the industry's transition both domestically and internationally. Financing the next phase of Preem's redevelopment aligns with this goal and is essential for meeting Sweden's ambitious climate targets, says Magnus Montan, CEO of Swedish Export Credit Corporation.

- Crédit Agricole CIB is a leading bank in sustainable financing and committed to support our clients in the green transition. Preem’s ambitious plan to convert the Lysekil refinery to biofuel production is well aligned with CACIB’s strategy to support our clients in their carbon neutrality plans, says Anders  Caneman, Director Export and Trade Finance at Crédit Agricole Corporate & Investment Bank.

In 2022, Preem secured the first loan covered by the National Debt Office's green credit program. This loan was designated for the reconstruction of the Synsat facility, scheduled to be operational after the summer of 2024 in Lysekil.

To qualify for the government's green credit guarantees, the respective investment must contribute to Sweden's environmental and climate policy objectives and aligned to the EU Taxonomy. The loan agreements with the Swedish Export Credit Corporation and Crédit Agricole Corporate & Investment Bank are contingent upon approval from Preem Group's other external financiers and the attainment of necessary environmental permits.