Financial close was reached on 7 July on the debt package for the 393-kilometre local portion of the Egypt-Jordan gas transmission pipeline. The $160 million floating-rate loan has a tenor of 12 years, with a four-year grace period, and was lead arranged by Housing Bank for Trade & Finance(MEED 4:6:04).
A total of 19 Egyptian and local institutions joined the transaction at syndication, with the largest commitment of $50 million coming from Egyptian Natural Gas Holding Company (EGAS). EGAS has received a Eur 100 million ($123.7 million) loan from the European Investment Bank to fund the project, which is being invested partly as debt and partly as equity in the project company, Al-Fajr Company for Transferring & Marketing Natural Gas. Al-Fajr is contributing $140 million in equity to the $300 million pipeline project and will operate the link for a 30-40-year period. Advising Amman on the project are Trowers & Hamlins, Charles River Associatesand Mapstone. The gas will be used to fuel local power stations and serve industrial customers. Al-Fajr is a joint venture between six Egyptian shareholders: the Finance Ministry and National Investment Bank, each with 25 per cent; EGAS and Egyptian Natural Gas Company (Gasco), each with 16.7 per cent; and Petrojet and Engineering for the Petroleum & Process Industries (Enppi), each with 8.3 per cent. The Aqaba-Rehab pipeline forms the second phase of an estimated $1,000 million project to build a regional gas grid eventually encompassing Syria and Lebanon. The first phase of the pipeline - bringing gas from the Mediterranean via Al-Arish and Taba to Aqaba - opened in July 2003 (MEED 30:1:04).