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

Financial crisis hurts private sector projects in world's major oil producing nation.
By Eman Goma
Mon 19 Jan 2009 05:45 PM

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)

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