Aldar Properties, Abu Dhabi's largest developer by market value, said on Monday it had agreed on a Dh2.2 billion ($599.1 million) Islamic lending facility from a group of United Arab Emirates (UAE) banks.

State-controlled Aldar, which is spearheading a construction boom in the UAE's capital city, said the four-year ijara facility would be used for general corporate purposes, without elaborating.

The property firm with about $65 billion worth of projects in the pipeline last year sold $2.53 billion of five-year bonds that comply with an Islamic ban on the payment of interest. It also took out a $2.1 billion four-year loan last June.

Abu Dhabi Commercial Bank, National Bank of Abu Dhabi's Islamic finance unit, Mashreqbank's Islamic finance unit, Dubai Islamic Bank, First Gulf Bank and Noor Islamic Bank will participate in the loan, Aldar said.

Ijara refers to a lease agreement complying with Islam's ban on paying interest, which it equates with usury.

'The success of this transaction, particularly given the challenging global financial environment, is an important endorsement of Aldar's track record,' Aldar chairman Ahmed Ali Al-Sayegh said in the statement.

Investors in the world's biggest oil-exporting region have spurred demand for Islamic finance, helped by a five-fold increase in oil prices since 2002.

But Gulf Arab issuers had put borrowing plans on hold as spreads on Islamic bonds widened amid a global credit crisis spurred by defaults on US subprime mortgages.

Through its holdings in Aldar and other companies, Abu Dhabi, the world's fifth-largest oil exporter, is spending billions of dollars on real estate, tourism and cultural projects to help diversify its economy away from oil.-Reuters