CORPORATE & PROJECT FINANCE

OAB’s strength lies in corporate banking, project finance and trade finance business. OAB has made a significant contribution to the development of the Sultanate’s economy by financing a number of infrastructure construction and development projects such as cement plants, highways, airports, harbours, power stations, water desalination plants and hospitals.

The Bank has been actively developing its capabilities in project finance. This has been demonstrated in its leading role in the first BOOT project in Oman, the Manah Power project, and our role as financial advisor in several other projects in Oman. Chiyoda/Foster Wheeler, who is building the LNG plant near Sur, selected OAB as the local banker. This contract is by far the largest (US$6 billion) and nationally the most important project in the Sultanate of Oman

See following list of projects financed by OAB over the last 5 years.  

I - Manah Power Project 1996/2000

First BOOT project in the Gulf. Promoted by Tractebel (a Belgian electric and gas utility) and a consortium of four local enterprises led by National Trading Company LLC. The total investment for the project was US$ 214 million.

The involvement of the Arab Bank Group was multi-faceted and can be summarized as follows:

. The equity obligations of the international and Omani founding shareholders.

were guaranteed by OAB which also acted as trustee bank,

· OAB participated in a US$ 17 million 12 years local term facility, subscribing 29%, of the facility.

· Arab Bank Plc, London is a member of the consortium of banks funding the 'B' and 'C loans which are a part of the IFC (International Finance Corporation) finance package for the project and is Agent for an ECGD Buyer Credit Facility of US$ 27 million providing one-third of the finance for this facility. The Buyer Credit had the twin distinctions of being the first such credit in which ECGD provided full cover for commercial and political risk
both pre and post completion.

Oman Arab Bank has also played a major' role in the second phase of this project to Produce 180MW of additional power by providing bridge finance to the sponsors and acting as sole issue manager for the RO 10.7 million rights issue.

2 - Oman LNG LLC, Oman - 1997/99
This US$6 billion project is amongst the largest projects to be undertaken in the Arab world. The plant consists of two gas liquefaction trains with a total capacity of 6.6 million tones p.a. The main shareholders are the Omani government with 51% and Shell with 34%. Arab Bank Plc joined the sub-underwriting phase of this US$ 1.2 billion debt financing and OAB participated in the US$75 million syndication arranged for the local banks. OAB was also selected by Chiyoda / Foster Wheeler as their local banker for the US$ 1.3 billion LNG; contract and established a special branch at the project site in Qalhat, Sur to provide banking services to the contractor and their staff.

OAB was also the banker for the main subcontractors of the project (downstream and upstream), providing financing facilities to Dywidag (Germany). TKK (Japan). Hani Archirodon (Cyprus), Wimpey Alawi (UK) Saipen (Italy), Dodsal (India). Stone & Webster (USA) and the local companics Zubair, Bahwan and Desert Lines.

3-  Salalah Port - 1997/98
OAB financed the main contractors Boskallis (Netherlands) and Hani Archirodon (Cyprus) who were awarded the Dredging and Civil Construction contracts and committed US$ 10 million in the syndicated facility arranged by Sociètè Generalè.

4 - Grand Hyatt Regency Muscat Hotel - 1997
OAB successfully arranged a US 23.4 million syndicated facility for the financing of this five-star hotel and was the banker for the main local contractor Al Jauf.

5-Oman Cement Co. - 1998
OAB arranged a US$ 15 million term loan and L/C facility to finance a 30mW power plant in Rusayl for captive use.

6 - Private Hospital project in Bausher - 1999/2000
OAB is the banker to the promoter of this US$ 17 million project and to the main
EPC contractor Vamed of Austria.

7 - Gubrah Desalination - 1999/2000
OAB was selected by Weir Westgarth of Scotland as their local banker for this US$ 46.4 million project involving the construction of a desalination unit. Arab Bank and Paribas financed this project with a commercial and export credit facility (ECOD) in favour of the Ministry of Finance.

8- Sohar Port - 2000
OAB was selected by the Turkish company STFA Construction as their local banker for Phase III of this project.

9 - Barka Power Station -2001
OAB together with Arab Bank underwrote US$ 50 million as lead manager in the financing of this US$ 350 million project and was selected by Enel of Italy and Hitachi of Japan to the main EPC contractors as their local banker

10 -Al KamiI 275 mW Power Station - 2001
OAB underwrote US$ 15 million in the syndicated facility and was selected by International Power of UK to be their local banker for the operation and maintenance company.

11 - Barka Water 'Transmission- 2001
OAB was selected by the EPC contractors Bogest Trading and ERKO of Turkey for this Us$40 million project.

12 - Al Sharqiya Sand Water Project - 2001
This US$ 28 million project was awarded to Galfar and Sade from France who chose OAB as their local banker.

13 - Major projects financed by OAB under the Government Soft Loan Administration program since 1996.
OAB continues to be the major provider of government soft loans to support various industries in Oman.

• Raysut Cement Co.: Expansion of cement plant
• Salalah Flour Mills: New flour mills in Salalah, US$ 20 million
• Oman Chemicals Industries: US$ 17.5 million zeolite project.
• Omani European Food Industries: US$ 20 million baby food project 
• National Rice Mills: US$ 13 million rice processing factory
• Oman Chlorine: US$ 25 million factory to manufacture Hydrochloric Acid.
  

14 - Oman Arab Bank financial advisory roles - 1997/2001

• Al Massarat Water Project: Advisor for Galfar, Mott MacDonald and Anglian Water (UK) for the US$ 183 million water project.
• PDO Motel: Advisor to Zubair for the US$ 25 million BOOT project to construct, operate and maintain staff accommodation for Petroleum Development Oman (PDO).
• Barr Al Jissah Resort: OAB has been selected as financial advisor for this US$ 250 million project.
•  Power projects: OAB has been advising a number of international power companies bidding for various privatization (power and communication) projects being considered in Oman.