Bank consortium extends USD 1.5 bn loan for UAE-Oman Hafeet Rail

The UAE-Oman Hafeet Rail project secured USD 1.5 bn in debt financing from a consortium of Emirati, Omani, and international lenders, according to a statement from Omani logistics firm Asyad. The AED and OMR-denominated debt facility consists of both conventional and Islamic tranches. The USD 2.5 bn joint project will connect the UAE with Oman’s Port of Sohar.

The railway’s budget was trimmed from the initial USD 3 bn to USD 2.5 bn, according to the state news agency, which only mentioned an optimization of resources as the reason behind the smaller budget.

Who chipped in? Participating local banks in the debt facility include Abu Dhabi Commercial Bank, Arab Bank, Commercial Bank of Dubai, First Abu Dhabi Bank (FAB), Abu Dhabi Islamic Bank, and Bank Ajman. The loan also saw a group of Omani lenders contribute, including Ahli Bank, Bank Dhofar, Bank Muscat, National Bank of Oman, Oman Arab Bank, Ahli Islamic Bank, Bank Muscat (Meethaq Islamic Banking), Bank Nizwa, and Alizz Islamic Bank. The National Bank of Kuwait and Standard Chartered Bank also participated.

ADVISORS- Standard Chartered served as the lead financial advisor, while FAB acted as the co-financial advisor. Since early 2023, Standard Chartered has helped secure the debt funding for the project.

Background: In 2022, Etihad Rail and Oman Rail formed a 50-50 joint venture to develop Hafeet Railway, aimed at boosting trade between the UAE and Oman. Later, Etihad Rail, sovereign wealth fund Mubadala, and Oman’s Asyad Group launched a new entity — Hafeet Rail — to work on the railway. The rail link will cut travel between Abu Dhabi and Sohar to 100 minutes, with freight trains moving at 120 km/h and passenger trains carrying up to 400 people at 200 km/h.

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