Banks in desalination plant finance deal

QEWC General Manager Fahd al-Mohannadi and officials of the four participating banks at the signing ceremony to announce the financing of the RAF A2 project at the Four Seasons Hotel yesterday. PICTURE: Jayaram  By Ramesh Mathew/Staff ReporterQatar Electricity and Water Company (QEWC) has signed a $450mn financing deal with four local banks to fund the construction of a desalination plant currently being built at Ras Abu Fontas, which, when completed, will account for 10% of the country’s water production.The plant, which will produce 36mn imperial gallons per day (MIGD), is set to start operations in June 2015.The four banks are the Qatar National Bank (QNB), Barwa Bank, Masraf Al Rayan and Qatar Islamic Bank. Being the lead arranger for the deal QNB will provide a $162mn conventional debt tranche and $18mn conventional standby facility.Barwa Bank, Masraf Al Rayan and Qatar Islamic Bank as Islamic-mandated lead arrangers will each provide $90mn under an Islamic facility, totalling $270mn as well as Islamic hedging.Speaking at the signing ceremony, attended by senior officials of the four participating banks, QEWC General Manager Fahd al-Mohannadi said the local banks demonstrated their financing strength and capabilities through their active participation in a major deal that would contribute to the supply of about 10% share to the Qatar national water production.“Now that the potential of the local market is well understood the financiers have come forward with terms and conditions agreeable to our company and their banks,” said al-Mohannadi while adding that the RAF A2 is a strategic project that would support sustainable growth of the local economy. Later, QEWC Business Development Manager Khalid  Jolo said: “The RAF A2 transaction represents a significant milestone in the Qatar history of project financing as for the first time ever in such a major deal, four Qatari banks have lined up together with the aim of realising a utility project, without any financial support from foreign financial banks or institutions.”QNB General manager (Group Corporate and Institution Banking) Abdulla Mubarak al-Khalifa said with QNB’s expertise and long experience in arranging project financing, his bank has been mandated by the QEWC to lead the deal.Others present at the signing were CEO of Barwa Bank Steve Troop, CEO of Masraf Al Rayan Adel Mustafawi and Group CEO of QIB Bassel Gamal.