KfW IPEX-Bank provides financing for a UFK-backed silicon project in Iceland

Frankfurt am Main (ots) -

- KfW IPEX-Bank is helping German firm PCC SE to invest in Iceland
- Project backed by the UFK scheme secures Germany's supply of raw
materials
- State-of-the-art technology from SMS Siemag - an EPC turnkey
contractor
- First large-volume, commercial form of structured project
finance in Iceland

By providing investment finance in the amount of USD 194 million,
KfW IPEX-Bank is helping the German firm PCC SE to build a
state-of-the-art silicon metal production plant in Husavik in the
north of Iceland. The complex financing structure with a term of 15
years (incl. construction time) not only provides backing from Euler
Hermes, but also incorporates an Untied Loan Guarantee (UFK). In
providing this coverage, the German Federal Government is supporting
raw materials projects abroad that are classed as being worthy of
promotion or that are in the particular state interest of the Federal
Republic of Germany. The silicon produced in the new silicon smelting
plant of "PCC BakkiSilicon hf" in Iceland is distributed to various
German companies from different industries on the basis of long-term
supply contracts. It is therefore being used to secure the supply of
raw materials in Germany. Düsseldorf-based SMS Siemag AG, one of the
world's leading companies in the field of metallurgy and rolling mill
technology, was awarded the contract to build the turnkey plant.

"The UFK coverage underlines just how relevant this business is to
the Federal Republic of Germany. Indeed, it is exclusively German
customers who are purchasing the silicon produced by PCC in Iceland,
which substantially helps our industry to secure the supply of raw
materials over the long term and become more independent on the
developments of the spot markets. The fact that SMS Siemag is behind
the highly efficient production technology and that, in providing the
financing, we are therefore also supporting German investment abroad
confirms both our strategy and our involvement in two respects," says
Markus Scheer, member of the Management Board of KfW IPEX-Bank.

The PCC BakkiSilicon project involves the construction of a plant
to produce high-purity silicon metal with a capacity of 32,000 mtpa.
The total project volume amounts to the equivalent of almost USD 300
million. The main investor in the plant, considered one of the most
modern silicon plants in the entire world, is the mid-sized German
firm PCC SE, based in Duisburg. Since it is an alloy metal, silicon
is used primarily in the aluminium industry. It is also the higher
quality silicon metal products for the chemicals, electronics and
solar industries which drive growth in global silicon demand.

The smelting plant primarily purchases quartzite, the basic
material needed to produce silicon, from one of the PCC SE Group's
own company quarry in Poland through a long-term supply agreement.
Landsvirkjun, Iceland's energy supplier, is meanwhile guaranteeing to
supply the energy required for the production operations on the basis
of a long-term supply agreement. The state-owned enterprise supplies
its customers with power sourced to 100% from renewable energy
generated primarily by hydropower plants but also by geothermal
plants and wind farms.

As an EPC (engineering, procurement and construction) contractor,
SMS Siemag is supplying the core components of the silicon smelting
plant as well as the relevant auxiliary production plants. SMS Siemag
will receive support in providing the turnkey plant from M&W Group
GmbH, a German plant engineering firm which has already implemented a
range of projects in Iceland. The plant is being built in an as-yet
undeveloped industrial estate in the north-east of Iceland and is
helping to create jobs (120 directly, more indirectly) and to
industrialise the north-east of Iceland. This is the first
large-volume, commercial form of structured project finance of its
kind in Iceland.

About PCC

PCC SE is a value-led management and investment company
headquartered in Duisburg, Germany. PCC SE manages a conglomerate
undertaking with around 2,900 employees located at 39 sites in 17
countries. The three main business areas of the PCC Group are
Chemicals, Energy and Logistics, with the Chemicals division making
up the main core of the Group. In fiscal 2013, PCC SE generated
consolidated sales of 624 million euros and realised an operating
profit (EBITDA) of 47.5 million euros. According to the Group´s
provisional, unaudited figures, sales recorded in 2014 amounted to
648 million euros, with EBITDA coming in at 51.4 million euros. For
more information: www.pcc.eu.

About KfW IPEX-Bank GmbH

Within the KfW Group, KfW IPEX-Bank is responsible for
international project and export finance. Its function of providing
financing to boost the German and European economy is derived from
the legal mandate assigned to KfW. It offers medium- and long-term
financing to support key export industries, to develop economic and
social infrastructure and to fund environmental and climate
protection projects. KfW IPEX-Bank operates as a legally independent
group subsidiary and plays a major role in fulfilling KfW's
promotional mission. It is represented in the most important economic
and financial centres across the globe.

Contact:
KfW IPEX-Bank GmbH, Palmengartenstraße 5-9, 60325 Frankfurt
Pressestelle: Thomas Krick, E-Mail: thomas.krick@kfw.de
Tel. 069 7431-2961, Fax: 069 7431-9409, E-Mail:
info@kfw-ipex-bank.de,
Internet: www.kfw-ipex-bank.de