Banks to extend Muharraq commitments

25 April 2011

Financial close for the Muharraq wastewater project expected by July

The three banks that are in talks to finance the Muharraq wastewater project in Bahrain have extended their commitments to fund the scheme by an extra three months as unrest in the country delays financial close.

Commitments to the project were due to expire in late April, but are now being extended to July in the hope that the deal will be financed by then.

Sources close to the project say the political unrest in Bahrain over the past two months has slowed progress on the deal, although all the banks are understood to remain committed to the project. The Finance Ministry has already written a letter to the banks to reassure them of the state’s commitment to the project.

“Three months should be enough extra time to comfortably reach financial close,” says one banker close to the scheme.

In mid-March, workers on the site were demobilised as a result of the civil unrest that brought Bahrain to a standstill. Security forces are now back in control of the country, although a heavy presence of armed guards and tanks remain around the capital, Manama.

The three banks looking to fund the project are France’s Natixis and Credit Agricole, and Japan’s Sumitomo Mitsubishi banking Corporation, along with export credit agency support from the Export-Import Bank of Korea (Kexim).

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