Etihad Rail has completed the AED4.7bn ($1.3bn) loan to fund the construction of the first phase of the UAE rail network.

Sources close to the process say the deal closed early in the New Year with a mixture of regional and international banks, almost a year after the UAE cabinet announced that it had approved plans for the company to borrow up to AED4.7bn.

Phase one of the Etihad Rail project involves the construction of an industrial rail line to transport sulphur between Habshan and Ruwais for Abu Dhabi National Oil Company (Adnoc). The funding has been secured for the project based on strong support from Adnoc, which has given lenders the comfort to do the deal.

The deal has a tenor of about five years, according to people close to the deal. Etihad Rail started approaching banks in mid-2012. Construction of the first phase of the network has already started.

The next phase of the Etihad Rail project involves the development of a rail line that stretches from Abu Dhabi into Dubai and across the country to the border with Oman. This part of the network includes a passenger line and will eventually link up with the planned GCC rail scheme.