Hafeet Rail Network Project Secure $1.5 Billion in Funding

Two years after announcing a joint venture (JV) between Etihad Rail and Oman Rail to launch Hafeet Rail Network linking the UAE and Oman, officials from the two GCC nations secured $1.5 billion for the project, which will be funded by a consortium of banks in the region.

The consortium of banks involved in this financing agreement include eight banks from the UAE – 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, and nine banks from Oman – 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.

Once completed, the Hafeet Rail Network project will connect port of Sohar in Oman with Abu Dhabi and is expected to further boost trade between the two countries. The Omani-Emirati railway network project is the first link in a unified transport and logistics chain that will span the region, delivering mutually beneficial socioeconomic and competitive advantages.

The $2.5 billion project, which is being implemented and operated by Hafeet Rail, demonstrates strong confidence from a diverse consortium of local, regional, and international lenders, underscoring the project’s strategic importance to both nations.

It is also a testament to the power of partnership, uniting Etihad Rail, Oman Rail, and Mubadala in a shared vision for a connected and prosperous future. Etihad Rail and ASYAD Group hold the largest shareholder stakes in the JV.

The 238 km long railway network includes 60 bridges, some towering up to 34 metres in height and tunnels stretching 2.5 km in length – will link five major ports and various industrial and free zones across the two nations.

A single freight train journey on the network is expected to transport more than 15,000 tonnes of cargo, or approximately 270 standard containers. Sectors set to benefit from this new capacity range from mining to iron and steel, agriculture and food, retail, e-commerce, and petrochemicals.

Saves Time

Once operational, the railway will cut the travel time between Abu Dhabi and Sohar to 100 minutes with freight trains reaching speeds of 120 km per hour. Passengers will be able to ride on the network, with one train being able to accommodate up to 400 travellers at a speed of 200 km per hour.

The Hafeet Rail project also aligns with both the UAE’s Centennial Plan 2071 and Oman Vision 2040, fostering economic growth, social cohesion, and sustainable development in both nations. The joint network pays homage to Jebel Hafeet, holding historical importance and strategic significance to both countries and aims to strengthen trade ties, boost tourism, and enhance connectivity between the two countries and the wider region.

Hafeet Rail has successfully reduced the bank financing for the Emirati-Omani rail network from the initially announced $3 billion to $2.5 billion, highlighting its approach and dedication to optimising resources while advancing the development of this critical project.

Standard Chartered, in its capacity as Lead Financial Advisor, played a pivotal role in procuring the required debt funding for the project’s development since early 2023.