Etihad Rail, the developer and operator of the UAE’s national railway network, announced today that it has secured financing of USD 1.28 billion (AED 4.7 billion) for Stage One of its railway project, which comprises the route from Shah and Habshan to Ruwais.
Commenting on the completion of financing for the first stage of the project, H.E. Nasser Alsowaidi, Chairman of Etihad Rail said, “The securing of this loan not only represents the beginning of a new era for the UAE in trade and travel through a transportation network that will connect all seven emirates with our GCC partners, but also reflects the international financial community’s confidence in Etihad Rail and the significant potential of the UAE’s national railway.”
The five-year loan will be financed on a club deal basis by National Bank of Abu Dhabi PJSC (NBAD), Bank of Tokyo-Mitsubishi UFJ (BTMU), Abu Dhabi Commercial Bank (ADCB) and HSBC Bank Middle East Limited (HSBC), with NBAD acting as both the facility and security agent of the loan.
Initial financing plans for the first stage of the project were originally approved by the United Arab Emirates’ Federal Cabinet in early 2012, and similarly authorised by the Abu Dhabi Executive Council.
Commenting on behalf of Etihad Rail, H.E. Dr. Nasser Saif Al Mansoori, CEO of Etihad Rail said, “This loan is yet another indicator of the significant progress being made at Etihad Rail. With the recent arrival of our wagons, the considerable headway being made in construction on Stage One, and as we look forward to the arrival of our locomotives later this quarter, Etihad Rail is on schedule to seeing the first train run from Habshan to Ruwais by the end of this year. We look forward to working with our banking partners as we develop this landmark project for the UAE, and appreciate the efforts of the Abu Dhabi National Oil Company (ADNOC) and the substantial role the company played in helping to secure this loan.”
Commenting on the USD $1.28 billion investment, Mark Yassin, Senior General Manager of Global Banking of the National Bank of Abu Dhabi, said: “Building a rail network in the UAE is one of the most important and crucial elements in the goal to establish Abu Dhabi and the United Arab Emirates as the enabler and epicentre of commerce. The National Bank of Abu Dhabi is committed to supporting ambitious projects like Etihad Rail which will ultimately link the nation’s seven emirates to other GCC countries and will become the greatest facilitator of increased trade. NBAD is a strong supporter of key infrastructure projects in the region and has contributed substantially to the financing of this railway transaction with advisory, lending and other services. We are very delighted to be part of this project and consider the ultimate build-out of the Etihad Rail project as a solid contribution to the UAE, and in fact the GCC, in terms of economic progress and diversification, as well as social and environmental benefits. We see the first phase as a substantial step to improved and increased cooperation and trade.”
Mr. Masaru Kuroda, Regional Head for the Middle East of Bank of Tokyo-Mitsubishi UFJ commented: “We are proud to be a part of such an important project for the United Arab Emirates, and to expand further our support to the government of the UAE in its continued mission to build a diversified economy.”
Commenting on the agreement, Ala’a Eraiqat, ADCB’s Chief Executive Officer, said: “The development of a national railway network is very critical and strategic for both Abu Dhabi and for the UAE. ADCB’s contribution to this transformational project demonstrates our strong commitment to the economic diversification of our nation and the development of our core infrastructure.”
Mohammad Al Tuwaijri, Regional Head of Global Banking and Markets at HSBC Middle East, added: “Investing in infrastructure is core to securing the foundations of the region's long-term economic success. We are pleased to offer our support to this impressive project, which will help promote growth across the UAE."
Stage One of the Etihad Rail network will extend 264 km from Shah and Habshan to Ruwais, facilitating a modern, safe, efficient and environmentally friendly means to transport ADNOC’s shipments of granulated sulphur for export at the port of Ruwais. Etihad Rail received its first shipment of wagons for Stage One in December last year, and will receive its first shipment of locomotives this quarter, while construction works on the route are well underway. Upon completion, the UAE’s national railway network will span approximately 1,200 km across the Emirates, boosting economic growth by connecting key centres of industry and population, and sustaining trade and social development. The Etihad Rail network will also form a vital part of the GCC railway network.