Documentation on the $300 million financing package for the Hidd power complex expansion is targeted to be signed by the end of February, following the award of a lead arranging mandate to a group of four banks (MEED 4:1:02).
The group is made up of BNP Paribas, HSBC Investment Bank, Bank of Tokyo-Mitsubishiand Bank of Bahrain & Kuwait. It bid for the mandate against a team of Citibankand Gulf International Bank. The selection was made by the Finance Ministry, which was advised by JP Morgan Chase & Company.
The financing will be made up of $200 million in export credits backed by the Swiss export credit agency, ERG, and a $100 million, 15-year commercial loan. The option of including an Islamic tranche within the commercial package, or even replacing this package, is also being considered. The terms of the proposed commercial tranche have not been disclosed. However, sources close to the deal say a step-up mechanism in the range of 75-120 basis points over Libor is under consideration.
The main contractor on the 700-MW expansion is France's Alstom.
Bankers say that the progress with the Hidd deal will allow the ministry to press forward with the financing for the Bahrain Petroleum Company (Bapco)refinery expansion. Citibank is acting as adviser on this deal (MEED 9:11:01).
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