Eastern District Cooling Co. Ltd., a wholly-owned subsidiary of Zamil Industrial Investment Company (Zamil Industrial), has signed with the National Commercial Bank (NCB), the first non-recourse project financing done in the region for a district cooling project. In November 2007, Zamil Industrial signed a 22-year energy performance contract with Saudi Basic Industries Corporation (SABIC) for the complete outsourcing of process and comfort cooling, including the building of a central cooling plant to supply 20,000 tons of refrigeration within the premises of Saudi Iron & Steel Company (Hadeed) in Jubail Industrial City. The total project size is valued at approximately SR300 million and it is expected to go on stream during 2010. NCB acted as sole mandated lead arranger for a 13.5-year Murabaha facility for an amount of SR206 million. The sponsors will bring the remaining amount as equity. The project is being developed by Energy Central Company, and advised by Gulf International Bank (GIB). The loan agreement was signed in Dammam on Jan. 27, 2010 by Abdulla Al Zamil, chief executive officer of Zamil Industrial and Mansoor Durrani, head of Project Finance, NCB, in the presence of Khalil Issa, CEO of Energy Central, and other representatives from Zamil Industrial, NCB and GIB. Al Zamil said: “We are delighted to achieve this major milestone towards the completion of this very challenging project. The strong teamwork of advisors and financiers supporting our project developer is greatly appreciated”. Durrani added: “We are privileged to be a part of this well-structured Islamic project finance deal. We anticipate that there will be a number of similar district cooling projects to be financed with similar structures in the GCC, and are pleased that Zamil is the first Saudi entity to close such a transaction.”
