During 2006, HSBC Amanah was involved in four project finance transactions, each of which demonstrated the bank’s product depth and innovation. The standout deal was a $600 million Islamic financing that contributed to the development of a $9.9 billion Saudi petrochemicals complex in Rabigh. PetroRabigh is a joint venture between Saudi Aramco and Sumitomo Chemical. The Islamic tranche was a financing based on the procurement of a number of core project assets and an Islamic forward lease of those assets to the project. The Rabigh project was the first to use this structure in Saudi Arabia.
The three other projects the bank helped finance were the Yanbu National Petrochemical Company (Yansab), Al-Waha and Sabafon.
Yansab is a company majority-owned by Sabic and formed to build a grass-roots integrated petrochemicals complex in Yanbu, Saudi Arabia. HSBC acted as an MLA for an $847 million Islamic loan, the biggest Islamic finance tranche in a project finance deal.
Al-Waha is the first wholly Islamic project finance transaction. The total facility is $500 million and HSBC acted as sole financial adviser to the sponsors – Sahara and Basell. In the Sabafon project, HSBC and Project & Export Finance jointly structured a $46.75 million Hermes-backed six-year Islamic buyer credit facility to finance the supply of telecommunications equipment to Sabafon of Yemen from CIB Siemens. The deal paved the way for Shariah-compliant ECA-backed transactions in the Middle East.
