Etihad Rail, the developer of the UAE’s national railway network, has confirmed that it has secured AED4.7bn ($1.28bn) to finance phase 1 of its railway project connecting Shah and Hahshan to Ruwais.

As MEED reported in early February, the deal was raised through a mixture of regional and international banks. The deal closed almost a year after the UAE cabinet announced it had approved plans for the company to borrow up to AED4.7bn.

The loan has a five-year tenor and will be financing on a club deal basis with National Bank of Abu Dhabi (NBAD), Bank of Tokyo-Mitsubishi UFJ, Abu Dhabi Commercial Bank and HSBC Middle East. NBAD is acting as the facility and security agent for the loan.

Etihad Rail started approaching banks in mid-2012. Construction of the first phase of the network has already started and the first train to run between Habshan to Ruwais is expected towards the end of this year.

The rail line will be used to transport sulphur from Habshan and Shah gasfields to Ruwais for the Abu Dhabi National Oil Company (Adnoc). The strong support from Adnoc helped give lenders confidence in the deal.

The railway is being built in three phases, with phase 2 set to link Abu Dhabi to Dubai.