Hafeet Rail secures $1.5bn loan for UAE-Oman rail link

Wam

Hafeet Rail, formerly Oman and Etihad Rail Company, has secured funding of $1.5 billion from a consortium of regional and global banks for the 238km railway network.

The $2.5 billion Omani-Emirati railway network project is the first link in a unified regional transport and logistics chain and will link five major ports and various industrial and free zones across the two Gulf neighbours, the UAE state-run Wam news agency said.

The funds will be drawn in both conventional and Islamic tranches in UAE dirhams and Omani rials. The exact split of the loan was not given.

The UAE bank consortium included Abu Dhabi Commercial Bank, Commercial Bank of Dubai, First Abu Dhabi Bank, Abu Dhabi Islamic Bank and Ajman Bank.

Banks from Oman were Ahli Bank, Bank Dhofar, Bank Muscat, National Bank of Oman, Oman Arab Bank, Ahli Islamic Bank, Bank Muscat’s Meethaq Islamic Banking unit, Bank Nizwa and Alizz Islamic Bank.

Regional and global banks included Jordan’s Arab Bank, National Bank of Kuwait and the UK’s Standard Chartered Bank.

Hafeet Rail, a joint venture between the UAE’s Etihad Rail, Mubadala Investment Company and Oman’s Asyad Group, has cut the overall cost from $3 billion to $2.5 billion.  

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In May, the company awarded the civil works and construction tender to an Omani-Emirati alliance led by Trojan Construction Group and Galfar Engineering and Contracting.

The railway network includes 60 bridges, some rising up to 34 m in height, and tunnels stretching 2.5km.

A single freight train journey will transport more than 15,000 tonnes of cargo or 270 standard containers. The sectors expected to benefit are mining, agriculture, food, retail, ecommerce and petrochemicals.

Once operational, the railway will cut the travel time between Abu Dhabi and Sohar to 100 minutes, with freight trains reaching speeds of 120km per hour. Passenger trains will be able to accommodate up to 400 travellers at a speed of 200km per hour.