Bridge finance fixed for Fujairah desal complex

08 March 2002

A $950 million bridge financing facility has been arranged for the Fujairah power, water and pipeline project being developed by Union Water & Electricity Company, a subsidiary of Abu Dhabi-based UAE Offsets Group.

Lead arranged by National Bank of Abu Dhabi (NBAD)on a sole basis, the five-year loan is understood to have a step-up pricing structure which starts at 37 basis points (bp) over Libor and averages 45 bp over the full term. With fees included, the all-in pricing is about 51-52 bp over Libor. The low pricing on the facility reflects the fact that the transaction is effectively guaranteed by the government of Abu Dhabi, bankers say.

A total of 14 banks have participated in the transaction: nine of them are UAE financial institutions; two of them are regional; and the other three are international.

Bankers say plans have been drawn up to replace the bridge facility with a properly structured project finance package when the power and water plant and an 185-kilometre pipeline linking it to Al-Ain are completed.

The engineering, procurement and construction (EPC) contract for the plant, worth AED 2,944 million ($802 million), was won by South Korea's Doosan Heavy Industries & Construction Company last June (MEED 13:7:01). The complex will have a capacity of 620 MW and 100 million gallons a day, and is scheduled for completion in mid 2003.

A team of the German arm of Paris-based Technip-Coflexip and the local Al-Jaber Energy Services Establishmentwas awarded the AED 1,663 million ($453 million) pipeline contract in August (MEED 17:8:01).

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