This week saw the signing of a US$5.8 billion financing agreement for the development of the Wa’ad Al Shamal Phosphate Mine, based in Saudi Arabia.
As part of the Kingdom’s efforts to create a stronger industrial base beyond oil refining and export, the project involves the construction of a phosphate mine in the north of the region.
With production expected to start in late 2016, the project sponsors include the Saudi Arabian mining company Ma’aden, Mosaic and Saudi Basic Industries Corporation. Alongside the sponsors, senior debt is also being provided by a consortium of 20 international and Saudi lenders. This comprises a combination of conventional and Islamic finance facilities. The Islamic facilities included a US$440 million Wakala facility along with procurement facilities involving Ijara fil thimma of US$775 million, US$90 million, US$29 million and US$252 million.
On behalf of the project’s senior lenders and sponsors, Operis was pleased to carry out an audit of the financial model representing the transaction, which included a full review of the model’s tax and accounting treatments, and a review of the transaction’s Islamic finance documentation.