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Project secures $1.5bln in financing from Emirati, Omani, regional and international banks
The UAE-Oman Hafeet Rail project, designed to connect the UAE National Railway Network with Oman’s Sohar Port, has reached financial close.
The project, valued at $2.5 billion, secured $1.5 billion in project finance debt from a mix of UAE, Omani, regional, and international banks, utilising both conventional and Islamic financing tranches in UAE dirhams and Omani rials.
The announcement was made at the inaugural Global Rail Transport Infrastructure Exhibition & Conference (Global Rail 2024), held in Abu Dhabi on Wednesday, according to a statement posted on Omani state-owned Asyad Groups website.
Hafeet Rail, a joint venture between the UAEs Etihad Rail, Mubadala and Asyad Group, is responsible for the implementation and operation of the 238-kilometre (km) railway network. The network will feature 60 bridges, some rising up to 34 metres, and tunnels spanning 2.5km.
The consortium of UAE banks included Abu Dhabi Commercial Bank, Commercial Bank of Dubai, First Abu Dhabi Bank, Abu Dhabi Islamic Bank, and Ajman Bank.
Omani banks involved in the deal include Ahli Bank, Bank Dhofar, Bank Muscat, National Bank of Oman, Oman Arab Bank, Ahli Islamic Bank, Bank Muscat’s Meethaq Islamic Banking unit, Bank Nizwa, and Alizz Islamic Bank.
Regional and international banks included Jordan’s Arab Bank, Kuwait’s National Bank of Kuwait and UK’s Standard Chartered Bank.
Standard Chartered acted as Lead Financial Advisor with First Abu Dhabi Bank as Co-Financial Advisor for the transaction.
The UAE-Oman railway will connect five major ports and various industrial and free zones across both countries, facilitating sectors such as mining, iron and steel, agriculture, food, retail, e-commerce, and petrochemicals. The system is expected to transport over 15,000 tonnes of cargo per freight train journey, equating to roughly 270 standard containers. The overall project cost was reduced from an initially announced $3 billion to $2.5 billion.
According to a May 2024 Abu Dhabi Media Office statement, the civil works and construction tender for the joint network was awarded to an Omani-Emirati consortium led by Trojan Construction Group and Galfar Engineering and Contracting with Tristar Engineering and Construction, and the National Infrastructure Construction Company. The tender for the systems and integration of the railway network was awarded to a joint venture between Siemens and Hassan Allam Construction. |
