'The facility was originally scheduled to be signed in March, but that was always pretty aggressive,' says a banker involved in the transaction. 'The delays have mostly come from the need to get the right text of the guarantee from the government of Abu Dhabi: one that is acceptable for the banks. The banks want proper evidence of the support with the correct structures and clear procedures. Although this is seemingly straightforward, there has been more learning involved than was originally expected.' It is understood that the guarantee sought by the banks will be sourced from Abu Dhabi's Finance Department.

The five-year facility has a step-up pricing structure which starts at 37.5 basis points (bp) over Libor for the first year, and rises to 40 bp for the second and then to 45 bp for the last three years. The participating banks were offered 15 bp in fees (MEED 10:5:02).

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 a 185-kilometre pipeline linking it to Al-Ain are completed in the third quarter of 2003.

National Bank of Abu Dhabi has been active on both sides of the transaction. It has acted as financial adviser to UWEC and has also been the single largest participant in the placement of the facility (MEED 8:3:02).