‘The expectation is that a European company will be awarded the key turbine contract,’ says a banker close to the transaction. ‘This opens the door to the ECAs [export credit agencies] and this really could be of benefit to both Alba and Bahrain. You only have to look as far back as the Hidd financing to see how well these structures can work.’

Project sources say Alstom Poweris best placed to win Alba’s turbine contract and, if it does, banks such as BNP Paribasand HSBCwill push hard for the inclusion of an export credits facility (see Power & Water). Both banks were among the lead arrangers of the Islamically-structured, ECA-backed financing for last year’s Hidd power plant expansion, on which Alstom won the main engineering, procurement and construction (EPC) contract (MEED 21:12:01).

Negotiations with JBIC remain live, however, and sources close to Alba say there are no immediate plans to divert from the planned financing tranches. ‘There are banks keen to bring export credits into the deal, but there are good reasons to think that they are misguided,’ says a project source.

Other aspects of the Alba financing are moving ahead. Syndication of the $500 million commercial tranche is well advanced and bankers report that commitments of $80 million-100 million have already been received, some way ahead of the $50 million-60 million target (MEED 7:2:03).

The $300 million metals tranche is also in syndication. Goldman Sachsand Gulf International Bank (GIB), the mandated lead arrangers, have secured the participation of at least three regional heavyweights. Riyad Bankand Banque Saudi Fransihave joined the tranche at the lead arranger level and Arab Bankhas come in at arranger level.

Yet to be brought to market is the slated $200 million local currency bond, which has been fully underwritten by Securities & Investment Company (Sico), Gulf Investment Corporation, National Bank of Bahrainand Bank of Bahrain & Kuwait. ‘Final discussions on the term sheet are still ongoing,’ says a banker. ‘They should be wrapped up soon and the bond launched in early March.’