Dubai Islamic Bank (DIB) hopes to play a key role in the $2 billion Iran-Kuwait water pipeline project. If chosen, it will take on part of the Islamic financing itself, and syndicate the rest to similar institutions in the region, senior bank officials said Wednesday, quoted by the Gulf News.
"The managing director of the company in charge of the $2 billion Iran-Kuwait water project approached us," said Adel Noori Jaber, DIB manager for international and direct investment. "
He said $400 million of the project financing will be managed by the Iranian government through Bank Melli Iran. Another $400 million financing will be provided by the Kuwait government.
"The senior project official told us that of the $1.2 billion left to finance, priority will be given to Islamic banks."
Meanwhile, the bank announced that it is close to signing financing deals of up to $80 million with Iranian companies. These include $20 million each for Iranian Railways, food company Frico and an automobile manufacturing group holding company.
DIB is also likely to provide $6 million for a subsidiary of the National Iranian Oil Co (NIOC). Since it entered the Iranian market in 1993 it has financed deals worth about $450 million, said the paper.
DIB has also reached an understanding with the Export Guarantee Fund of Iran to finance companies guaranteed by the fund. A memorandum of understanding is expected to be signed shortly.
The $1.2 billion requirement for financing is expected to be divided into Islamic and conventional banking tranches. Jaber declined to speculate as to how much would be allocated to Islamic financing.
"We hope to get the mandate to manage the Islamic tranche of the transaction. It is a prestigious project and will be the biggest for the bank. Hopefully, we will give them some good business. We were the first Islamic bank worldwide and we have a good reputation." -- Albawaba.com
