UAE’s Etihad Rail to seek $2 billion in financing

The UAE plans a network of tracks running from Saudi Arabia to Fujairah emirate on the Gulf of Oman. (Supplied)
Updated 04 July 2019
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UAE’s Etihad Rail to seek $2 billion in financing

  • One of the sources said the new debt would most likely be a corporate loan

DUBAI: Etihad Rail, the developer and operator of the United Arab Emirates’ national rail network, is expected to approach banks for about $2 billion to help finance the expansion of the network, banking sources familiar with the matter said.

The UAE, which launched the first phase of its rail project in 2016, plans to have a network with 1,200 km (750 miles) of track costing about $11 billion, running from the border with Saudi Arabia to Fujairah emirate on the Gulf of Oman.

One of the sources said the new debt would most likely be a corporate loan, rather than project financing.

A spokeswoman at Etihad Rail, owned 70 percent by the Abu Dhabi government and 30 percent by the UAE federal government, was not immediately available to comment.

The first phase of the UAE rail project was built to transport granulated sulfur. The broader project aims to offer freight and passenger services across the country.

Gulf states plan a range of regional infrastructure projects from power to transport and housing. A drop in oil prices in 2014 led governments to rein in spending, halting several projects, but a recent price recovery has improved prospects.

Etihad Rail suspended tendering for phase two of its project in 2016, saying it was reviewing timing and delivery.

Last year, the Department of Finance in Abu Dhabi, the richest of the seven emirates making up the UAE, and the UAE Finance Ministry signed a financing deal for the second phase. It did not provide details of financing involved at the time.

The Abu Dhabi Department of Finance did not respond to a request for comment on the latest financing plan. A UAE Finance Ministry spokeswoman directed requests for comment to Etihad Rail.

The first phase of the project was backed in 2013 by a $1.28 billion five-year financing package, provided by a consortium of banks including First Abu Dhabi Bank, which was previously called National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, HSBC and MUFG.


Saudi economy expands by 1.7 percent in first quarter

Saudi Arabia’s non-oil private sector growth was the big winner, climbing to an 18-month high in June. (Reuters)
Updated 16 July 2019
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Saudi economy expands by 1.7 percent in first quarter

  • WTI futures gained 30 per cent in the first three months of the year while Brent crude was up 25 percent over the quarter

RIYADH: Saudi Arabia's economy grew at 1.7 percent in the first quarter of 2019, the Kingdom's media ministry said on Monday.
The expansion reflects ongoing economic reforms and the modernization of the financial sector, analysts said.
The Kingdom’s non-oil private sector growth rose to an 18-month high in June, according to PMI data released earlier this month.
Financial analyst Talat Zaki Hafiz told Arab News the positive economic growth trend, especially in the non-oil economy, showed that ongoing reforms were producing results.
"The commitment of the Saudi government is to diversify the economy and move it from dependence on oil, and this is what we see — the mix of non-oil and oil revenue," he said.
A recovery in the oil price in the first three months of the year has also spurred growth.
WTI futures gained 30 per cent in the first three months of the year while Brent crude was up 25 percent over the quarter.