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The debut Islamic financing facility by the Oman-based GRE was signed for $235 million
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Deal part of NBB Group’s efforts to target Bahraini and GCC customers
The NBB Group, comprising the National Bank of Bahrain and Bahrain Islamic Bank, has announced the closing of an Ijara facility for Oman-based Mazoon Electricity Company (MZEC), with the duo acting as the sole structuring, arranging and book-running banks on the facility.
The debut Islamic financing facility by the Oman-based GRE was signed for an amount of $235 million. The proceeds will be used to finance the capital expenditure plans of MZEC for 2021, mainly comprising investments in the electricity distribution and supply network in its license area in Oman.
The facility is structured as a two-year ijara bridge facility marking the first Islamic bank facility for Nama Group that has in the past raised several conventional bank loan facilities and issuances in the debt capital markets under RegS and 144a format, including a 10-year $500 million debut Sukuk in 2017.
The facility received interest from regional banks of Bahrain, Kuwait and UAE with 12 financiers participating in the facility and an oversubscribed order book.
Commenting on the achievement, NBB Group CEO (Corporate and Institutional Investment Banking) Hisham AlKurdi, said: “The NBB Group is delighted to advise and arrange to finance for strategically important transactions such as the electricity distribution and supply sector in Oman. The success of a debut Islamic facility by Mazoon Electricity paves the way to attract capital from Islamic financiers for critical infrastructure.”
“As the national bank of the Kingdom of Bahrain, NBB Group views Oman as one of its key markets and is proud to be associated with Mazoon Electricity and Nama Holding on this transaction,” he stated.
The deal comes as part of the NBB Group’s continuous efforts to further develop its activities and offerings, targeting both Bahraini and strategic GCC customers, he added.
Mazoon Electricity CEO Salim Said Al Kamyani said: “The inaugural Islamic financing facility is a milestone transaction for the group, thus adding new banking relationships to the group and providing it access to Islamic financiers of the region to fund the investment in electricity distribution infrastructure of the sultanate.”
Mazoon electricity is owned by the Oman government through its holding company for the electricity and water sector, Nama Holding, which in turn is owned by the sultanate’s sovereign wealth fund Oman Investment Authority.
Nama Chief Financial Officer Ahmed Tufail expressed delight at the support the group had received from Islamic financiers for this transaction.
“It reinforces the confidence placed by a broad array of capital providers in the transparent and robust regulatory framework of the electricity sector of Oman and its strong credit fundamentals,” he added.