Sumitomo Corporation in conjunction with Malakoff Corporation Berhad and Cadagua, S.A. have entered into a project finance loan agreement for funding the Al Ghubrah Independent Water Project (IWP), a desalination plant in Muscat City, Oman.

This project was awarded by the state-owned Oman Power and Water Procurement Company S.A.O.C. in November 2012.

The project company, Muscat City Desalination Company S.A.O.C. (MCDC), was established on January 19th, 2013. Malakoff International Ltd (MIL) and Sumitomo Corporation each owns 45 % of project developer, MCDC, with the balance interest held by Cadagua.

The plant, expected to be completed by October 2014, will provide over 190,000 cubic meters of fresh water per day over the course of 20 years, which is enough to supply over 800,000 people in the area. The contract is a build-own-operate (BOO).

The loan agreement, comprised of an all-Japanese team of financial institutions, will be co-financed by Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi UFJ, which is also the appointed financial advisor, and Japan Bank for International Cooperation.

Last year, he consortium was selected to undertake the development and construction of the US$300 million Al Ghubrah water desalination project.

Source: Sumitomo Group & InfraPPP