Abu Dhabi’s Al-Gharbia Pipes Company has signed a $185m loan from a syndication of local and Japanese banks, led by the Japan Bank for International Cooperation (JBIC).

JBIC extended a $111m loan, while Japan’s Sumitomo Mitsui Banking Corporation (SMBC), Mizuho Bank and National Bank of Abu Dhabi (NBAD) also participated.

SMBC was the financial advisor.

The loan will finance the construction of a new $300m factory in the Khalifa Industrial Zone Abu Dhabi (Kizad). Due for completion in 2018, it will manufacture large diameter, sour grade steel pipes for oil and gas pipelines. The facility will have a production capacity of up to 240,000 tonnes per year.  

The finance will provide Al-Gharbia with stable financing for at least 10 years, according to local state news agency Wam.

“This multi-sponsor and multi-tranche deal represents Senaat’s lowest ever cost of funding, and is one of the most competitive financing schemes within Abu Dhabi’s industrial sector,” said Senaat’s acting CEO, Jamal Salem Al Dhaheri.

This is despite tightening liquidity in the GCC banking sector, and rising costs of funding.

Al-Gharbia is 51 per cent owned by UAE industrial conglomerate Senaat in a joint venture with Japanese steel companies, JFE Steel Corporation and Marubeni-Itochu Steel. JBIC has a strategy of supporting Japanese investments in the GCC.