* Mashreq, First Gulf Bank, Al Hilal among banks on deal
* Financing to be 80 pct sharia-compliant, 20 pct
* Deal is second big sharia-compliant regional project
finance deal in Aug
* Islamic financing facility for Medina Airport signed in
(Adds details, interview with TAV Airport)
By Bernardo Vizcaino and Praveen Menon
DUBAI, Aug 8 The consortium building Abu Dhabi's
new airport terminal is close to securing a 4-billion dirhams
($1.1 billion) financing deal, which will be mainly
sharia-compliant, banking sources said on Wednesday.
A deal would mark the second major regional project finance
venture to rely on Islamic financing facilities this month.
Turkey's TAV Insaat, Dubai's Arabtec Holding and
Athens-based Consolidated Contractors Co. were awarded a
$2.9-billion contract in June to build a mid-field terminal in
Dubai lender Mashreq is leading the financing deal
which includes First Gulf Bank, Union National Bank
, Al Hilal Bank, all from Abu Dhabi, and Jordan's Arab
Bank, said two banking sources close to the deal who
declined to be identified.
The financing will be 80-percent sharia-compliant with the
remainder secured via a conventional loan, the sources said. The
four-year contractor finance facility will see all banks provide
roughly equal amounts.
An official at Tav Airports confirmed the use of Islamic
financing but declined to give further details on the deal.
"We are indeed using Islamic finance for our Abu Dhabi
project. Details of the financing are to be released later,"
Burcu Geris, Project and Structured Finance Coordinator at TAV
Airports, said in an emailed statement.
TAV Insaat is a unit of Turkish builder Akfen Holding
, which holds a stake in airport operator TAV
It marks the second time this month that TAV has turned to
Islamic finance to fund its joint projects in the region.
Last week, a consortium including TAV said it had secured a
$1.2 billion sharia-compliant facility for Saudi Arabia's Medina
"Islamic finance through Saudi banks was our first option
for financing in Medina Airport," Geris said. "It only came as a
natural choice since Saudi banks are both very liquid and very
much experienced in structuring and providing Islamic finance
Saudi British Bank, National Commercial Bank and
Arab National Bank were lead arrangers, with National
Commercial Bank serving as the Islamic structuring bank.
The Medina Airport project, which also includes Saudi Oger
and Al Rajhi Holding Group, is slated to be completed in the
first half of 2015.
Islamic project financing in the Gulf Arab region can be
complicated because foreign ownership rules can restrict assets
being pledged for such deals.
In the Medina Airport transaction, the largest of the three
tranches, worth $719 million, used intangible assets in the form
of contractual rights which were transferred to the lead
arrangers instead of physical assets.
"We believe this is a model which could be used on other
PPPs (public private partnerships) in the region where it is not
possible to own key infrastructure assets," Geris said.
(Additional reporting by Humeyra Pamuk and David French;
Editing by Amran Abocar)