Maaden to launch $7.5bn phosphates city financing in April

29 January 2013

Project in the north of the kingdom aiming for financial close before year end

Saudi Arabian Mining Company (Maaden) is set to start approaching banks to finance its $7.5bn new phosphates project in the north of the country in April, according to the company’s finance director Khalid al-Rowais.

Speaking at the MEED Middle East Project Finance 2013 conference in Dubai, Al-Rowais said the company was also targeting first drawdown on the completed financing before the end of the year. The financing is expected to feature a sukuk (Islamic bond) issue.

“Sukuk is one option being considered, but we need to make sure we are accessing the right pools of liquidity. We haven’t done a sukuk before so it will be new for us,” he said.“Our primary focus is on the local banks, but we have already been approached by some export credit agencies to join the financing.”

The debt portion of the project is expected to be in the region of $4.5bn-5bn.

Funds will be used to develop the Waad al-Shamal, or North Promise, Industrial Mineral City, which is being built at Umm Waal, on the northern border with Jordan.

The UK’s HSBC is financial adviser to Maaden on the project.

Al-Rowais said the project, that will add 1.5 million tonnes of phosphates to Maaden’s phosphates capacity, is advancing rapidly. “We have the land allocated already,” he said. “We have the gas allocated. The railway extension had been approved. The Northern Promise Industrial City masterplan contract has been signed with Bechtel.”

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