Emirates Steel Industries (ESI) is set to decide on the bank allocations for its $1.5bn financing by 25 June and is aiming to complete the loan deal by the end of July.

Sources close to the project say a $500m tranche, with insurance from Italian export credit agency (ECA) Sace, is set to close even sooner with support from a number of international banks.

The rest of the funding is split between an Islamic loan and a conventional non-recourse project finance loan. The exact size of these two tranches has not finalised, but they are expected to total around $1bn.

The Sace-covered loan will be made to ESI’s parent company, General Holding Corporation (GHC), which recently put an additional $500m into the development of a new plant at Taweelah. The scheme will now likely be built at Musaffah.

“The Sace loan is on track to reach financial close before the rest of the funding,” says one banker.

The rest of the loans will be used to refinance a $700m bridge loan that expires in August and the expansion of the Taweelah plant.