Hafeet Rail has finalized bank financing for the Hafeet Rail network project, which will connect the Port of Sohar with the United Arab Emirates (UAE). The total financing amounts to OMR577 million ($1.5 million), backed by Omani and Emirati banks, as well as regional and international financial institutions.
The signing ceremony took place under the auspices of Sheikh Theyab bin Mohamed bin Zayed Al Nahyan, deputy chairman of the Presidential Court for Development and Fallen Heroes’ Affairs, and chairman of Etihad Rail. This announcement was made at the inaugural Global Rail Transport Infrastructure Exhibition & Conference – Global Rail 2024.
Unified transport network
The OMR961 million joint initiative, being implemented and operated by Hafeet Rail, showcases significant confidence from a diverse group of local, regional, and international lenders, highlighting the project’s strategic relevance to both nations. This Omani-Emirati railway project represents the first segment of a unified transport and logistics network that will benefit the region economically and competitively. Additionally, the collaboration involves Etihad Rail, Oman Rail, and Mubadala, reflecting a shared vision for a connected and prosperous future, with Etihad Rail and ASYAD Group holding the largest shares in the venture.
Read more: UAE-Oman rail network: Logistics hub to usher a new era of growth
Economic growth catalyst
Furthermore, Eng. Abdulrahman Al Hatmi, CEO of ASYAD Group, noted the substantial interest from leading banks in both countries to finance the project, indicating robust confidence in this strategic investment. He mentioned that Hafeet Rail’s success in securing bank financing not only strengthens the transport and logistics sector but also fuels economic growth and enhances commercial interactions between the two nations. He asserted that this joint rail network would undeniably boost the competitiveness of both countries, positioning the region as a vital commercial and investment hub linked to global markets via ports and state-of-the-art airports.
Crucial trade link
Shadi Malak, CEO of Etihad Rail, expressed that the successful bank financing for Hafeet Rail serves as a strong endorsement of the project’s transformative potential. He further explained that by linking the UAE National Railway Network with Sohar Port, they are establishing a crucial trade artery that enhances efficiencies and solidifies the region’s status as a global logistics center. Moreover, he emphasized that the bond between the UAE and Oman, rooted in a shared history, is now being further strengthened with Hafeet Rail, paving the way for progress, prosperity, and limitless opportunities for their citizens.
Financial advisory and support
Standard Chartered served as the Lead Financial Advisor, playing a crucial role in securing the necessary debt funding for the project’s development since early 2023, while First Abu Dhabi Bank acted as Co-Financial Advisor. The project finance debt was acquired from a mix of UAE, Omani, regional, and international banks across both conventional and Islamic financing structures in AED and OMR currencies.
Consortium of banks involved
The consortium of banks engaged in this financing includes several prominent institutions from the UAE, such as Abu Dhabi Commercial Bank, Arab Bank, Commercial Bank of Dubai, First Abu Dhabi Bank, National Bank of Kuwait, Standard Chartered Bank, Abu Dhabi Islamic Bank, and Bank Ajman. Additionally, nine banks from Oman participated, including Ahli Bank, Bank Dhofar, Bank Muscat, National Bank of Oman, Oman Arab Bank, Ahli Islamic Bank, Bank Muscat (Meethaq Islamic Banking), Bank Nizwa, and Alizz Islamic Bank.
Engineering and infrastructure details
The railway network will span 238 km, featuring 60 bridges—some reaching heights of 34 meters—and tunnels extending 2.5 km. It will connect five major ports and various industrial and free zones across the two countries. A single freight train journey on this network is anticipated to transport over 15,000 tons of cargo, equivalent to around 270 standard containers. Benefitting sectors include mining, iron and steel, agriculture, food, retail, e-commerce, and petrochemicals.
Operational efficiency and speed
Upon becoming operational, the railway will reduce travel time between Abu Dhabi and Sohar to just 100 minutes, with freight trains capable of reaching speeds of 120 km/h. Passenger trains will accommodate up to 400 travelers at speeds of 200 km/h.
Alignment with national visions
The Hafeet Rail project aligns with the UAE’s Centennial Plan 2071 and Oman Vision 2040, promoting economic growth, social cohesion, and sustainable development in both nations. This joint network pays tribute to Jebel Hafeet, which holds both historical and strategic significance, and aims to strengthen trade relations, enhance tourism, and improve connectivity between the two countries and the broader region.
Commitment to financial optimization
Hafeet Rail has successfully reduced the initial requirement for bank financing for the Emirati-Omani rail network from $3 billion to $2.5 billion. This reduction demonstrates the company’s strategic management and commitment to optimizing resources while advancing this essential project. Even with a smaller budget, Hafeet Rail remains dedicated to delivering exceptional quality and efficiency, adhering to the highest global standards.
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