Deal is the second major regional project finance venture signed this month that relies on Islamic finance
The consortium building Abu Dhabi’s new airport has nearly secured a $1.1bn financing deal, which shall be mainly Sharia compliant, it was announced on Wednesday.
In June of this year, a consortium consisting of Turkey’s TAV Insaat, Dubai’s Arabtec Holding and the Athen’s based Consolidated Contractors were awarded a $2.9bn contract to build a mid-field terminal in the UAE capital.
The financing deal is the second major regional project finance venture agreed this month that is relying on Islamic financing facilities.
Mashreq Bank is leading the financing deal in conjunction with First Gulf Bank and Union National Bank. Abu Dhabi’s Al Hilal Bank and Jordan’s Arab Bank are also involved in the deal, a Reuters news report said.
The financing will be 80% Sharia-compliant, while the remainder will be secured using conventional loans, the report added. The contractor financing facility will run for four years, with all the banks providing roughly equal amounts.
Burcu Geris, project and structured finance coordinator at TAV Airports told Reuters that a consortium including TAV had secured a $1.2bn Sharia-compliant facility for Saudi Arabia’s Medina Airport project
“Islamic finance through Saudi banks was our first option for financing Medina Airport,” Geris said. “It only came as a natural choice since Saudi banks are both very liquid and very much experienced in structuring and providing Islamic facilities,” he told the news service.
Saudi Bank, National Commercial Bank and Arab National Bank were the lead arrangers on that project, with National Commercial Bank serving as the Islamic structuring bank.
The Medina Airport project, which also includes Saudi Oger and Al Rajhi Holding Group, is slated to be completed by the first half of 2015.
Upon completion in 2017, the 700,000m2 terminal will accommodate up to 65 aircraft, including the world’s largest commercial aircraft, the Airbus A-380.
The building will be constructed using approximately 69,000 tonnes of steel, more than 680,000m3 of concrete, nearly 500,000 m2of steel and glass cladding, 135,000 tonnes of rebar, 360,000 m2of suspended ceilings and 325,000 m2 of natural stone flooring.