Sponsors on the Muharraq sewage treatment plant in Bahrain have signed financing agreements for the project and intend to close the deal within the next week.

A consortium of South Korea’s Samsung Engineering Company, Abu Dhabi financial services firm Invest AD and the UK’s United Utilities International was selected to build the project in February (MEED 11:2:11).

The Export-Import Bank of Korea (Kexim) is lending $208m for the project, while three commercial banks are providing $44m each. The commercial banks are:

  • Credit Agricole (France)
  • Natixis (France)
  • SMBC (Japan)

The debt has a tenor of 23 years. According to a source close to the deal, debt pricing is in the mid-200 basis points range.

The plant will process 100,000 cubic metres a day and is scheduled to achieve completion after 30 months. The concession period was originally set at 27 years, but this was later extended to 29 years.

All three partners in the consortium are providing equity for the project, with Samsung committing 45 per cent, Invest AD 35 per cent and United Utilities 20 per cent.

The government of Bahrain is being advised on the project by Germany’s Fichtner, UK bank HSBC and UK law firm Norton Rose. Australia’s Macquarie and the UK’s Ashurst are financial and legal advisers respectively.