$1.5 Billion Financing Secured for Hafeet Rail Network Connecting UAE and Oman

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The Hafeet Rail network project, which will link the UAE to the Port of Sohar in Oman, has successfully secured $1.5 billion in project financing. This funding comes from a collaboration of Emirati and Omani banks, as well as regional and international institutions, encompassing both conventional and Islamic financing in UAE dirhams and Omani rials.

Spanning 238 kilometers, the railway will feature 60 bridges—some reaching heights of 34 meters—and tunnels extending up to 2.5 kilometers. It aims to connect five major ports along with various industrial and free zones in both countries. Once operational, the railway will reduce travel time between Abu Dhabi and Sohar to just 100 minutes, with freight trains capable of reaching speeds of 120 km/h.

The passenger service will accommodate up to 400 travelers per train, traveling at speeds of 200 km/h. Each freight train journey is expected to transport over 15,000 tonnes of cargo, equivalent to around 270 standard containers. Key sectors benefiting from this new capacity include mining, agriculture, retail, e-commerce, and petrochemicals.

This Omani-Emirati railway project represents the first step in a unified transport and logistics network across the region, providing significant socioeconomic advantages and enhancing trade ties, tourism, and connectivity between the two nations and beyond.

Named after the historically significant Jebel Hafeet, the project aims to fortify economic relationships. Hafeet Rail has successfully reduced the financing requirement from an initial $3 billion to $2.5 billion, optimizing resources while pushing forward with development.

The project is a collaboration involving Etihad Rail, Oman Rail, and Mubadala, with Etihad Rail and ASYAD Group being the primary shareholders. The initiative aligns with the UAE’s Centennial Plan 2071 and Oman Vision 2040, promoting economic growth and sustainability.

Abdulrahman Al Hatmi, CEO of Asyad Group, emphasized the strong banking interest in the project as a testament to its strategic importance. He noted that the joint rail network will enhance the competitiveness of both countries, linking them to global markets via ports and modern airports.

Shadi Malak, CEO of Etihad Rail, remarked that connecting the UAE National Railway Network to Sohar Port will unlock trade efficiencies and reinforce the region’s logistics capabilities. He highlighted the deep-rooted historical ties between the UAE and Oman as a foundation for this new venture.

Standard Chartered acted as the Lead Financial Advisor for securing the debt funding since early 2023, while First Abu Dhabi Bank served as Co-Financial Advisor. The financing consortium included banks from both countries, with notable participation from Abu Dhabi Commercial Bank, Arab Bank, and several others.

The announcement of the financing success took place at the inaugural Global Rail Transport Infrastructure Exhibition & Conference – Global Rail 2024, in Abu Dhabi, under the patronage of His Highness Sheikh Mansour bin Zayed Al Nahyan, and attended by key dignitaries from both nations and representatives from the financing institutions.

Source : khaleejtimes.com

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