Oman’s local banks to enter mega-project financing
The construction of two natural gas pipelines in Oman is now much closer to realization – a much needed “boost in the arm” for the industrialization of Oman. A consortium of international and local banks are coming together to provide loans totaling $410 million to fund the planning and construction of the project.
The project consists of two pipelines, one of which is 700 km long from Seih Nihaida to Salafa and costs $180 million. The other is 300 km long stretching from Fahud to Sohar and costing $124 million.
The Oman Times reports that “Almost all local banks in Oman have evinced interest in participating in the loan arrangement.” More importantly though is the fact that this project represents the first time so many local banks have come out in support of such a venture.
The Industrial Bank of Japan, Arab Banking Corporation, and Banque Nationale Paribas lead the international consortium, which will provide the bulk of the loan. However, the role to be played by the local banking institutions is not to be viewed in terms of minority investors or political pawns, rather it is a sign of the local banking institutions coming to grips with mega-project financing and development. As indicated to Oman Times by one bank chief, this is a learning process by way of example and participation.
Indian-based company Dodsal Ltd has been contracted to construct both pipelines. Completion of the pipelines is expected within two years. Both pipelines are expected to become operational at about the same time. –(Albawaba-MEBG)