Kuwait telecoms firm Zain is working on a financing deal with Finnish export credit agency Finnvera to fund the development of its Saudi Arabian network.

Bankers close to the deal say the financing could be in place by mid-2010.

In January 2008, Zain awarded a contract worth $925m to Finland’s Nokia Siemens Networks and the US’ Motorola for development of a second and third generation mobile network in Saudi Arabia. The contract also includes a five-year management services deal.

Zain launched its services in Saudi Arabia in August 2008. In July 2009 it raised a syndicated loan worth $2.5bn to finance the development of its Saudi business and refinance a loan originally put in place in September 2007 to fund the $6.1bn purchase of the kingdom’s third mobile licence.

The $2.5bn deal has a term of two years and pays a margin of 425 basis points over the London interbank offered rate (Libor). Zain has the option to extend the loan by six months.