State-backed firm behind US$11bn railway project secures financing for first phases
Etihad Rail, the state-backed firm building a US$11bn railway network in the United Arab Emirates, said on Tuesday it secured US$1.28bn of bank financing to build the first phase of the project.
Gulf states are spending hundreds of billions of dollars on infrastructure projects, ranging from power, transport and housing, as they look to strengthen their economies and improve services for local populations in the wake of the Arab Spring.
Saudi Arabia alone has earmarked around US$400bn to spend on infrastructure over a five year period.
Phase one of the UAE rail network will extend 264 km in the west of the country from Shah and Habshan near Abu Dhabi to Ruwais and transport shipments of granulated sulphur for export for the Abu Dhabi National Oil Company.
Upon completion, the UAE's national railway network will span about 1,200 km and form part of the planned Gulf-wide railway network.
"The securing of this loan 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," Nasser al Sowaidi, chairman of Etihad Rail, said in the statement.
National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, HSBC Holdings and Bank of Tokyo Mitsubishi UFJ arranged the five-year financing, Etihad Rail said.
Construction of the first phase, one of three planned stages, is already underway after the awarding of a US$900m civil and track works contract was awarded in October 2011.
Etihad Rail received its first shipment of wagons for phase one in December last year and expects to receive the first shipment of locomotives this quarter, the statement added.