Bankers in the region have now received details of the financing for the $20bn Sadara Chemical Company project at Jubail, being developed by sponsors Saudi Aramco and the US’ Dow Chemical.

Lenders have been given until 23 July to express their interest in funding the loans for the project, which will be split between $2.7bn bank loans, $6.5bn from export credit agencies (ECA), $1.4bn from a local sukuk (Islamic bond), $1.3bn from the local Public Investment Fund and $530m from the Saudi Industrial Development Fund. The company will also raise money from listed shares on the Saudi Stock Market (Tadawul).

The pair hope to complete the financing for the project by the end of the year, although bankers say this timetable is ambitious. “The bank tranche is quite small really, but the ECA component is huge,” says one Saudi banker. “The real challenge, though, will be getting it closed by the end of the year, as they are hoping.”

Another project finance banker based in Dubai says that “ultimately the deal will get done”, but that trying to raise that much financing would be difficult. “In the current market, [raising the finance needed] will not be easy. Especially if they try to squeeze the banks too much on pricing,” the banker adds.

The deal is being arranged by the UK’s Royal Bank of Scotland and the local Riyad Bank.