Hafeet Rail signs financing agreements worth RO577 million
Published: 03:10 PM,Oct 09,2024 | EDITED : 06:10 PM,Oct 09,2024
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Abu Dhabi - Hafeet Rail has signed bank financing agreements worth RO577 million (USD 1.5 billion) from Omani and Emirati banks, in addition to contributions from regional and international banks, under the patronage of Sheikh Theyab bin Mohamed bin Zayed Al Nahyan, Deputy Chairman of the Presidential Court for Development Affairs and Martyrs' Families, Chairman of the Board of Directors of Etihad Rail.
The agreement was signed on the sidelines of the first Global Rail that brought together more than 1,000 attendees representing various companies and organizations from around the world, alongside 50 international delegations and 300 exhibitors from more than 100 countries.
This came during the activities of the first day of the opening edition of the Global Rail and Transport and Infrastructure Exhibition and Conference (Global Rail) 2024 in Abu Dhabi, hosted by Etihad Rail.
This comes as an affirmation of the strategic importance of the joint project between the two countries, which has a total value of more than RO961 million and is being implemented and operated by Hafeet Rail. It also reflects the great confidence that this project has received from local, regional, and international banks in both countries.
The Oman-Emirati joint railway network project represents a key link in a unified chain of transportation and logistics services that will extend across the countries of the region, providing social benefits and competitive economic incentives for both countries. The joint network also reflects the strong partnership and joint efforts between Etihad Rail, Oman Rail, and Mubadala Investment Company (Mubadala) to achieve a connected and prosperous future for railways.
Asyad Group and Etihad Rail own the largest shareholding in the joint venture company, Hafeet Rail. Eng. Abdulrahman Al Hatmi, CEO of ASYAD Group, said, 'The great interest shown by leading banks in both countries to finance the project reflects the firm confidence in this strategic investment.'
He added that Hafeet Rail’s success in securing this bank financing not only enhances the transportation and logistics sector but also contributes to stimulating economic growth and enhancing trade activity between the two countries.
He stressed that the Oman-Emirati joint railway network project will enhance the competitiveness of the two countries as a vital trade and investment hub that connects them to global markets through their modern seaports and airports.
Shadi Malak, CEO of Etihad Rail, pointed out that the success of Hafeet Rail in obtaining bank financing is a strong indication of the wide confidence that this strategic project has enjoyed, not only in the transport and logistics sector but also in the banking sector level in both countries. It also enhances the region’s ability to attract investments and confirms its position as a major commercial center and a hub for accessing global markets,” he added, noting that linking Sohar Port to the UAE’s national railway network will represent a vital artery for trade between the two countries, in addition to consolidating the region’s position as a global hub for operations.
Standard Chartered Bank, as the lead financial advisor, played a pivotal role in securing the bank financing required to develop the project, since early 2023. First Abu Dhabi Bank also acted as a co-financial advisor. The bank loan to finance the project was obtained from a group of Emirati, Omani, regional, and international banks through conventional and Islamic tranches in both Omani riyals and Emirati dirhams.
A group of banks from the Sultanate of Oman participated in the successful bank financing of the first cross-border railway network between the United Arab Emirates and the Sultanate of Oman, including Ahli Bank, Bank Dhofar, Bank Muscat, National Bank of Oman, Oman Arab Bank, Ahli Islamic, Bank Muscat (Meethaq Islamic Banking), Bank Nizwa, and Alizz Bank Islamic. From the UAE, Abu Dhabi Commercial Bank, Arab Bank, Dubai Commercial Bank, First Abu Dhabi Bank, National Bank of Kuwait, Standard Chartered, Abu Dhabi Islamic Bank, and Ajman Bank.
The joint railway network extends over 238 kilometers and includes 60 bridges, reaching a height of 34 meters, and tunnels extending over 2.5 kilometers, and will connect five major ports, industrial centers, and several free zones in the two countries.
Each train trip across the network is expected to transport more than 15,000 tons of goods, equivalent to 270 standard containers.
Sectors that will benefit from these new capabilities include mining, iron and steel, agriculture, food, retail, e-commerce, and petrochemicals. When operational, the railway network will reduce travel time between Abu Dhabi and Sohar to just 100 minutes, and the maximum speed of the freight train will reach 120 km/hour. While the maximum speed of the passenger train reaches 200 km/h, one train can accommodate up to 400 passengers.
The project name comes from Jebel Hafeet, which has historical and strategic importance for the UAE and Oman and aims to strengthen trade relations and enhance tourism and cohesion between the two countries and the region in general.
Hafeet Rail has succeeded in reducing the value required to implement the Omani-Emirati railway network from $3 billion, which was previously announced, to $2.5 billion, which reflects the effectiveness of the company's efforts and plans to improve its ability to develop and implement this strategic project with a lower financing value, while ensuring the provision of high levels of quality and efficiency according to the highest international standards and levels.
The signing of the financing agreements was attended by Sheikh Nasser bin Sulaiman al Harthy, Deputy Chairman of the Oman Investment Authority for Operations and Chairman of the Board of Directors of Asyad Group, members of the Board of Directors of Hafeet Rail, the company responsible for implementing and operating the UAE-Oman railway network, and some officials from the financing entities.
Over three days, the event is expected to attract 22,000 attendees who will explore innovative policy frameworks to accelerate rail development and promote cross-sector collaboration to enhance the added value and potential of the railway sector. In addition, the event includes a Technical Conference showcasing the latest research and developments in railway innovation presented by leading industry experts and academic institutes and organizations, alongside the International Projects Pavilion highlighting global railway operators, developers, and industry leaders.
The Finance Pavilion at the exhibition will offer an opportunity for financiers, developers, and stakeholders to discuss project financing, establish strategic partnerships, and explore investment solutions to advance and develop the sector. Additionally, an Innovation Hub will enable railway entrepreneurs and R&D specialists to showcase the latest cutting-edge technologies that will redefine the future of transport, infrastructure, and logistics.
The agreement was signed on the sidelines of the first Global Rail that brought together more than 1,000 attendees representing various companies and organizations from around the world, alongside 50 international delegations and 300 exhibitors from more than 100 countries.
This came during the activities of the first day of the opening edition of the Global Rail and Transport and Infrastructure Exhibition and Conference (Global Rail) 2024 in Abu Dhabi, hosted by Etihad Rail.
This comes as an affirmation of the strategic importance of the joint project between the two countries, which has a total value of more than RO961 million and is being implemented and operated by Hafeet Rail. It also reflects the great confidence that this project has received from local, regional, and international banks in both countries.
The Oman-Emirati joint railway network project represents a key link in a unified chain of transportation and logistics services that will extend across the countries of the region, providing social benefits and competitive economic incentives for both countries. The joint network also reflects the strong partnership and joint efforts between Etihad Rail, Oman Rail, and Mubadala Investment Company (Mubadala) to achieve a connected and prosperous future for railways.
Asyad Group and Etihad Rail own the largest shareholding in the joint venture company, Hafeet Rail. Eng. Abdulrahman Al Hatmi, CEO of ASYAD Group, said, 'The great interest shown by leading banks in both countries to finance the project reflects the firm confidence in this strategic investment.'
He added that Hafeet Rail’s success in securing this bank financing not only enhances the transportation and logistics sector but also contributes to stimulating economic growth and enhancing trade activity between the two countries.
He stressed that the Oman-Emirati joint railway network project will enhance the competitiveness of the two countries as a vital trade and investment hub that connects them to global markets through their modern seaports and airports.
Shadi Malak, CEO of Etihad Rail, pointed out that the success of Hafeet Rail in obtaining bank financing is a strong indication of the wide confidence that this strategic project has enjoyed, not only in the transport and logistics sector but also in the banking sector level in both countries. It also enhances the region’s ability to attract investments and confirms its position as a major commercial center and a hub for accessing global markets,” he added, noting that linking Sohar Port to the UAE’s national railway network will represent a vital artery for trade between the two countries, in addition to consolidating the region’s position as a global hub for operations.
Standard Chartered Bank, as the lead financial advisor, played a pivotal role in securing the bank financing required to develop the project, since early 2023. First Abu Dhabi Bank also acted as a co-financial advisor. The bank loan to finance the project was obtained from a group of Emirati, Omani, regional, and international banks through conventional and Islamic tranches in both Omani riyals and Emirati dirhams.
A group of banks from the Sultanate of Oman participated in the successful bank financing of the first cross-border railway network between the United Arab Emirates and the Sultanate of Oman, including Ahli Bank, Bank Dhofar, Bank Muscat, National Bank of Oman, Oman Arab Bank, Ahli Islamic, Bank Muscat (Meethaq Islamic Banking), Bank Nizwa, and Alizz Bank Islamic. From the UAE, Abu Dhabi Commercial Bank, Arab Bank, Dubai Commercial Bank, First Abu Dhabi Bank, National Bank of Kuwait, Standard Chartered, Abu Dhabi Islamic Bank, and Ajman Bank.
The joint railway network extends over 238 kilometers and includes 60 bridges, reaching a height of 34 meters, and tunnels extending over 2.5 kilometers, and will connect five major ports, industrial centers, and several free zones in the two countries.
Each train trip across the network is expected to transport more than 15,000 tons of goods, equivalent to 270 standard containers.
Sectors that will benefit from these new capabilities include mining, iron and steel, agriculture, food, retail, e-commerce, and petrochemicals. When operational, the railway network will reduce travel time between Abu Dhabi and Sohar to just 100 minutes, and the maximum speed of the freight train will reach 120 km/hour. While the maximum speed of the passenger train reaches 200 km/h, one train can accommodate up to 400 passengers.
The project name comes from Jebel Hafeet, which has historical and strategic importance for the UAE and Oman and aims to strengthen trade relations and enhance tourism and cohesion between the two countries and the region in general.
Hafeet Rail has succeeded in reducing the value required to implement the Omani-Emirati railway network from $3 billion, which was previously announced, to $2.5 billion, which reflects the effectiveness of the company's efforts and plans to improve its ability to develop and implement this strategic project with a lower financing value, while ensuring the provision of high levels of quality and efficiency according to the highest international standards and levels.
The signing of the financing agreements was attended by Sheikh Nasser bin Sulaiman al Harthy, Deputy Chairman of the Oman Investment Authority for Operations and Chairman of the Board of Directors of Asyad Group, members of the Board of Directors of Hafeet Rail, the company responsible for implementing and operating the UAE-Oman railway network, and some officials from the financing entities.
Over three days, the event is expected to attract 22,000 attendees who will explore innovative policy frameworks to accelerate rail development and promote cross-sector collaboration to enhance the added value and potential of the railway sector. In addition, the event includes a Technical Conference showcasing the latest research and developments in railway innovation presented by leading industry experts and academic institutes and organizations, alongside the International Projects Pavilion highlighting global railway operators, developers, and industry leaders.
The Finance Pavilion at the exhibition will offer an opportunity for financiers, developers, and stakeholders to discuss project financing, establish strategic partnerships, and explore investment solutions to advance and develop the sector. Additionally, an Innovation Hub will enable railway entrepreneurs and R&D specialists to showcase the latest cutting-edge technologies that will redefine the future of transport, infrastructure, and logistics.