Al-Rajhi Bank has under-written a SR1.7bn Islamic finance facility. This includes a SR1.275bn ijara, or lease, to cover the majority of costs incurred during construction, scheduled to take 22 months.

Total costs for the project, which will increase capacity at the port by 30 million square feet, are estimated at SR1.9bn.

Al-Rajhi will provide SR900m of the ijara, with Saudi Fransi Bank supplying the remaining SR375m.

The bank will provide a further standby facility, a working capital facility and a letter of credit for equipment supply.

A consortium of Al-Rajhi and Standard Bank of South Africa is advising Red Sea Gateway Terminal Company, a subsidiary of Saudi Industrial Services Company (Sisco).

China Harbour Engineering Company has been confirmed as the winning bidder for the contract to build the new terminal (MEED 9:11:07).

China Harbour will construct the terminal on a build, operate, transfer basis.

Shanghai Zhenhua Port Machinery Company of China will supply cranes and other equipment.

The new terminal, which will have berths with a draught of 16.5 metres to accommodate the largest container vessels, is scheduled to become operational by the fourth quarter of 2009.

China Harbour saw off competition from Geneva-registered Archirodon Construction (Overseas), the Italian group Condotte, and Van Oord of the Netherlands to win the civil works contract.

The build-operate-transfer agreement runs for 40 years.