Maaden signs $5bn financing for Saudi phosphate city

01 July 2014

Maaden financing features export credit agency support from South Korea and Canada

The Maaden Waad al-Shamal Phosphate Company, a subsidiary of Saudi Arabian Mining Company (Maaden), has signed a $5bn financing contract to support the construction of a phosphate mining project. The deal is one of the biggest project financings to be signed to date in the Middle East this year.

The Waad al-Shamal phosphates city is being built at Umm Waal on Saudi Arabia’s northern border with Jordan.

Financing agreements were signed on 30 June, within the first half of the 2014 as forecast by MEED earlier this year. Commitments were submitted by banks at the end of 2013.

The financing package is split between Saudi’s Public Investment Fund, which is a shareholder in Maaden, and commercial bank debt. Both Saudi Arabian and International banks have contributed to the facility, as have export credit agencies from South Korea and Canada. HSBC is financial adviser on the scheme.

The financing package is for 16.5 years and will be repaid in semi-annual instalments starting at the end of December 2018. The total cost of the project is $7.5bn and production at the new mine is due to start in late 2016.

The Saudi Arabian Mining Company, the Mosaic Company and Saudi Basic Industries Corporation (Sabic) will own 60 per cent, 25 per cent and 15 per cent of the joint venture in charge of developing the Waad al-Shamal Phosphate project.

Banks and financial institutions participating in the phosphate mine financing facility

Saudi banks:

International banks and financial institutions

  • BNP Paribas Saudi Arabia (France)
  • HSBC Bank Middle East (UK)
  • KfW IPEX Bank (Germany)
  • Mizuho Bank (Japan)
  • SMBC (Japan)
  • The Bank of Tokyo-Mitsubishi UFJ (Japan)
  • Export Development Canada
  • Korea Exim
  • Korea Trade Insurance Corporation (K-Sure)

The official signing of the financing follows news that Maaden is planning to issue tenders for a contract to build a water and wastewater treatment plant at its Waad al-Shamal mining city before the end of July.

Maaden announced on 15 May that it intends to carry out a rights issue of SR5.6bn ($1.5bn), with the plan to use the capital increase to expand the company’s phosphate and gold operations as well as to fund its aluminium project.

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