Ahli United Bank BSC (AUB) and Arab Banking Corporation (ABC) today announced a deal to finance a $480 million port development in Egypt.

The facility agreement was signed by the banks with Damietta International Port Company (Dipco).

The $480 million project finance facility will be syndicated in the coming weeks to a select group of Egyptian, regional and international banks.

The facility will be used to finance the development of a new container terminal, set to be the largest of its kind in the Middle East, within the Port of Damietta on Egypt's Mediterranean coast.

Damietta International Port Company which is an international consortium led by KGL PI, a subsidiary of Kuwait based KGL, was earlier awarded a 40-year concession by the Damietta Port Authority to construct, develop and operate a container terminal which is set for completion in 2009.

Located 70 km west of the Mediterranean entrance of the Suez Canal and with links to the world's busiest trade routes, the new container terminal is part of Dipco plans to transform the port into a major transhipment hub in the entire eastern Mediterranean.

With a draft of 16.5 m, the new terminal within the Port of Damietta is expected to handle some of the largest containers in the Mediterranean and will significantly lower operating costs and sailing time for transhipment activities.

KGL PI has also constructed and currently operates one of the most modern container terminals in the region at Port Saqr in Ras Al Khaimah, UAE, in addition to operating a terminal at its home base of Shuaiba, Kuwait.

The signing of the agreement was announced by Mohammed Al Mazeedi, chairman and managing director of Dipco and chairman and CEO of KGL Ports International Company, Kuwait; Adel El Labban, group CEO and managing director, Ahli United Bank and Abdulmagid Breish, deputy chief executive and chief banking officer, Arab Banking Corporation.

AUB and ABC succeeded in negotiating and documenting the facility agreement within eight weeks of being selected for this mandate. The financing commitments achieved within such a short timeframe underline the specialised expertise, flexibility and speed which regional banks are now able to provide. The port's local banking requirements will be handled by AUB through its subsidiary, AUB Egypt, which has a branch in Damietta.

Speaking on the occasion, Al Mazeedi said: "We are pleased to have two major regional banks acting as lead arrangers for financing such a major project. As two of the Middle East's premier, integrated banking groups, AUB and ABC have consistently proven that they have both the capability and network to successfully underwrite the most specialised and extensive of infrastructure projects."

For his part, El Labban said: "At AUB, we are pleased to be part of such a high profile project. This project fits well with our strategy to be a major contributor toward the economic development of the region. With our operations in Egypt now firmly established, AUB is perfectly poised to play a leading and expanded role in the financing of projects that are vital to the growth of regional economies like Egypt."

On behalf of ABC, Breish said: "We are delighted to be involved in the financing of the Damietta Port project, which is expected to significantly contribute to the infrastructure and trade flows in Egypt and the eastern Mediterranean region". - TradeArabia News Service