LONDON: The $1.7bn financing for Bahrain’s Al Dur independent water and power project (IWPP) has been signed via arranging banks Calyon, Mashreqbank and Standard Chartered Bank, bankers close to the deal said.

The project has attracted support from a mix of international, regional and Islamic banks and export credit agencies and it is the first major new project financing to close in the Gulf in 2009. The financing includes a $1.2bn international facility, which is structured as an eight-year, non-recourse club term loan. $420m is covered by Korean export credit agency Korea Export Insurance Corporation (KEIC), the bankers said.

There is also a $300m Islamic loan and a $200m US Import-Export bank facility, ranking pari passu with the international tranche, they added.

The margin ranges from 250-350 bps over LIBOR, one of the sources said. Commitments were received from Al Rajhi, Arab National Bank, Arab Bank, Bank of Tokyo Mitsubishi UFJ, Banque Saudi Fransi, BayernLB, Calyon, CIC Credit Mutuel, Fortis, HSBC, KBC, KfW-Ipex, Mashreq, National Australian Bank, Riyad Bank, Societe Generale, Standard Chartered Bank and WestLB, the bankers said. The project is equally owned by a consortium of GDF Suez and Gulf Investment Corporation (GIC) and benefits from a 20-year power and water purchase agreement with the Electricity and Water Authority of Bahrain (EWA). The main contractor is Hyundai Heavy Industries.

The Al Dur plant will be located in the south of Bahrain, about 40km from Al Ezzel, another power generation plant in which GDF Suez has a 45 percent stake. The plant is scheduled to enter commercial operation by mid-2011.