Abu Dhabi, 12 October 2024 – Dentons has successfully advised on the project financing and development of the Hafeet Rail project, the GCC’s first cross-border rail initiative, which will link Abu Dhabi with Sohar Port in Oman.
The US$3 billion Hafeet Rail project, jointly sponsored by Etihad Rail and Oman Rail with the support of Mubadala Investment Company, has secured US$1.5 billion in project finance debt. This funding reflects strong confidence from a diverse consortium of local, regional, and international lenders. Notably, eight Emirati and nine Omani financial institutions have backed the project, underscoring its strategic significance for both nations.
The railway network will span 238km and feature 60 bridges, including some reaching heights of up to 34 metres, as well as tunnels extending as long as 2.5km. It will connect five major ports and various industrial and free zones across the UAE and Oman. Each freight train is expected to carry over 15,000 tonnes of cargo, roughly the equivalent of 270 standard containers. Key sectors such as mining, steel, agriculture, retail, e-commerce, and petrochemicals will significantly benefit from this enhanced capacity. Additionally, travel time between Abu Dhabi and Sohar will be cut to just 100 minutes, with freight trains operating at speeds of up to 120 km/h. Passenger trains, capable of carrying up to 400 travellers, will reach speeds of 200 km/h.
Dentons provided comprehensive legal counsel on the project’s financing structure, the concession agreement for construction and services on the UAE side, and a track access agreement enabling UAE companies to connect with existing rail networks.
This project is set to revolutionize regional transportation by enhancing the mobility of goods and people between the UAE and Oman, while also reinforcing the strong historical ties between the two nations and contributing to their sustainability objectives.
Stephen Knight, Dentons’ Banking and Finance partner based in Abu Dhabi, stated: “We are proud to have played a role in supporting Hafeet Rail on this landmark cross-border project, a first for the Middle East. This achievement showcases Dentons’ ability to execute large-scale, multidisciplinary projects seamlessly across different regions. It also builds on our legacy of advising on landmark projects in the region, including the largest renewable energy project in the Middle East and the construction of the iconic Etihad Towers.”
The Dentons team was led by partner Stephen Knight, with key contributions from partners Kanishka Singh, Sadaf Buchanan, Jamie Gibson, Yasser Taqi, and Jon Nash, alongside counsel Martin Watt, senior associate Annabel Vincent, and associates Elen Roberts, Shireen Al-Busaidi, Ben Suthers, Bayan Jafari-Eshaiker, and Nisha Gupta.
