The Al Dur US$2.1bn independent water and power production project (IWPP) financing in Bahrain has reached financial close. All financial documents were signed on June 29.

Over 20 lenders, including the US export credit agency (ECA) US Ex-Im participated in the deal.

The 1,234MW project financing consists of a mixture of commercial bank debt, direct loans from ECAs, export credit covered loans and Islamic financing instruments.

Law firm Shearman and Sterling advised the lenders, and lead partner, Ben Shorten comments: “The challenging global financial circumstances at the time the deal got to market meant we worked closely with the lenders and sponsors to create an innovative financial structure that addressed risk to the satisfaction of all the lenders.”

The lenders included: Al Rajhi, Arab Bank, Arab National Bank, Bank of Tokyo-Mitsubishi, Banque Saudi Fransi, Bayern LB, Calyon, CIC, Dexia, Export Development Canada, Fortis, HSBC, Islamic Bank of Asia, KBC, KfW-Ipex, Mashreqbank, NAB, Societe Generale, Standard Chartered Bank, WestLB and US Ex-Im.

Korea Export Insurance Corporation (KEIC) provided political and commercial risk cover for part of the financing.

US Ex-Im provided a US$230mn direct loan to support the sale by General Electric International (GE) of gas and steam turbines and related equipment.

GE will provide four 9FA gas turbines, two C7 steam turbines, and ancillary equipment and services to Al Dur. The combined-cycle power plant will use natural gas as primary fuel and fuel oil (diesel) as contingency. It is US Ex-Im’s first project financing of a combined water and power facility.

"This is US Ex-Im’s first large transaction in support of US exports to Bahrain since the two countries signed a free trade agreement in 2006," says US Ex-Im chairman and president Fred Hochberg. "The transaction is in part a result of the many visits to the region made by US Ex-Im director Bijan Kian, whose portfolio includes the Middle East."

The project is owned by a consortium of GDF Suez and Gulf Investment Corporation.