Ad Dur, Bahrain

What is it?

A financing package to fund the 218,000m³/d and 1,234MW independent water and power project (IWPP) at Ad Dur in Bahrain, using seawater reverse osmosis.

Who is responsible?

GdF Suez Energy International and Gulf Investment Corporation together hold 70% of the project company, with First Energy Bank, Instrata Capital and First Bahrain Bank making up the balance. Degrémont is responsible for the design and construction of the plant. The $1.567 billion eight-year debt package was arranged by Calyon, Standard Chartered and Mashreqbank, and includes a $288.5 million Islamic tranche, as well as a $229 million 10-year loan from US Ex-Im Bank. Korea Export Insurance Corporation is providing political and commercial risk cover for $275 million of the international tranche.

What makes it special?

• The eight-year "mini-perm" debt package was a creative piece of financial engineering which neatly avoided short-term refinancing risk, whilst responding to commercial banks’ reluctance to lend at longer tenors in difficult market conditions.

• At $288.5 million, the Islamic tranche is the largest yet in a financing package supporting an independent water and power project in the Gulf. The loan from US Ex-Im Bank marked the export credit agency’s first involvement in the financing of a combined power and water facility in the Gulf.

• The risk protection afforded by the KEIC insurance package helped to lower the overall debt service burden - an important factor in keeping the project on track.