Bank of China contributes to tranche 3 of $325 million export financing facility to Hyundai for the construction of the Jebel Ali Power and Desalination Station ‘L’ Phase 2 (Linked to Record ID#99010, #99011, #99012, #99013, #99021)

Project narrative

On September 13, 2005, China Construction Bank (CCB) and Bank of China (BOC) each contributed an estimated $36.11 million to a $325 million multi-tranche export finance loan facility to Hyundai for the construction of the Jebel Ali Jebel Ali Power and Desalination Station ‘L’ Phase 2, commissioned by the Dubai Electricity & Water Authority (DEWA). The first tranche, captured at #99010 for CCB and #99011 for BOC, was a performance-based facility with an estimated size of $87.5 million, a maturity of five (5) years, and an interest rate of 40bps (0.4%) plus contemporary LIBOR. The second tranche, captured at #99012 for CCB and #99013 for BOC, was an advance payment guarantee facility with an estimated size of $87.5 million, a maturity of three (3) years, and an interest rate of 35bps (0.35%) plus contemporary LIBOR. The third tranche, captured at #99021 for CCB and #99022 for BOC, was an import and refinancing Letter of Credit (LC) facility with a size of $150 million, a two (2) year grace period, and a stipulation that the facility must be refinanced within 90 days. The import portion of the facility had an interest rate of 60bps (0.6%) while the refinancing portion had an interest rate of 90bps (0.9%). Nine (9) known institutions participated in the lending syndicate. Arab Bank acted as sole mandated lead arranger (MLA). Mashreqbank, Abu Dhabi Commercial Bank (ADCB), and Korea Exchange Bank (KEB) acted as arrangers. Raiffeisen Zentralbank acted as co-arranger. Emirates NBD and China Construction Bank (CCB) acted as lead managers. Bank of China (BOC) and Union de Banques Arabes et Francaises (UBAF) acted as managers. The performance and advance payment guarantee facilities were fully and unconditionally guaranteed by Korea Trade Insurance Corporation (K-Sure). The loan was originally oversubscribed by an unknown amount. Hyundai Engineering & Construction Co. and Fisia Italimpianti, a subsidiary of Impregilo, were jointly awarded the engineering, procurement, and construction (EPC) contract. The project had a contract value of $696 million and was transferred to DEWA upon completion in 2008. The project was expected to supply 1,200MW of electricity and 80 million gallons of water per day.