Sulaibiya finance signed

28 June 2002

The facility agreements for the KD 114 million ($368 million) debt finance for the Sulaibiya wastewater project were signed on 24 June. Financial close is expected to be reached in early July.

The project company Utilities Development Company (UDC)- a consortium in which the local Mohamed Abdulmohsin Kharafi & Sonsholds a 75 per cent stake and the US' Ionics holds 25 per cent - is taking the 25-year borrowing from a lead-arranging group comprising National Bank of Kuwait, Bank of Kuwait & the Middle East and The Gulf Bank (MEED 24:8:01). The facility has been priced at 200 basis points over the Kuwait interbank offered rate (Kibor).

The facility has established a number of significant landmarks for the regional project finance industry. With a tenor of 25 years, it is the longest-term project finance deal ever provided in the Gulf. It is also the first full-scale, properly structured transaction denominated in one of the GCC's local currencies. In addition, it is providing finance for what is the first build-operate-transfer project in Kuwait and the first private sector wastewater project in the region (MEED 21:6:02).

ABN AMRO acted as financial adviser to UDC.

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