Credit crunch delays Bahrain's power, water projects - GIC

Financial crisis hurts private sector projects in world's major oil producing nation.

Tight international credit market conditions have delayed a $2.2 billion power and water project in Bahrain, the chief executive of Gulf Investment Corporation (GIC) said on Monday.

The credit crunch has slowed the flow of capital to the region, leading to a slew of project delays and cancellations. Private sector projects have been hurt the most.

The Al Dur project is 50 percent owned by GIC, with France's GDF Suez owning the other 50 percent.

"Due to the financial crisis, we are negotiating new terms with some of the loaning banks," Chief Executive Hisham al-Razzuqi told Reuters by telephone. The project would be delayed by a few months, he added.

GIC is targeting other means of financing including export financing, Razzuqi said.

Al Dur was due for completion in 2011. The plant will have power generation capacity of 1,234 megawatts, and will be able to desalinate 218,000 cubic metres of water per day.

GDF Suez has contacted a group of banks over financing the plant, Reuters Loan Pricing Corporation (RLPC) reported earlier this month.

Calyon, Mashreqbank and Standard Chartered had committed $100 million to the financing, RLPC reported.

The Al Dur plant will be located in the south of Bahrain, about 40 kms from Al Ezzel, another power generation plant in which GDF Suez has a 45 percent stake. (Reuters)

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

NOTE: Comments posted on arabianbusiness.com may be printed in the magazine Arabian Business

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
Natural solution: Saudi's renewed plans meet growing energy demands

Natural solution: Saudi's renewed plans meet growing energy demands

Saudi Arabia has long toyed with the renewable energy sector...

Power to the people in Saudi Arabia

Power to the people in Saudi Arabia

As Saudi Arabia fights to control surging electricity demand...

The upstream movement: Oil producers must invest to avoid another crisis

The upstream movement: Oil producers must invest to avoid another crisis

While oil producers continue to debate a reduction in output...

Most Discussed
sponsoredTracking