The UAE’s Etihad Rail and Mubadala and Oman’s Asyad Group have signed project financing agreements worth $1.5bn with banks for the Hafeet Rail project, which will connect the two countries.

The agreements were announced during the opening ceremony of the GlobalRail event held in Abu Dhabi on 8 October.

Local and international banks participating in the financing arrangement include the UAE’s Abu Dhabi Commercial Bank, First Abu Dhabi Bank, Abu Dhabi Islamic Bank, Bank Ajman and Commercial Bank of Dubai, Oman’s Ahli Bank, Bank Dhofar, Bank Muscat, National Bank of Oman, Oman Arab Bank, Ahli Islamic Bank, Meethaq Islamic Banking, Bank Nizwa and Alizz Islamic Bank, Jordan’s Arab Bank, Kuwait's National Bank of Kuwait and UK-based Standard Chartered.

Established in September 2022, the Oman-Etihad Rail Company (OERC) will implement the Hafeet Rail project.

The project received a push after OERC inked a strategic agreement with Abu Dhabi-based Mubadala Investment Company to support its development.

The UAE-Oman Rail Network is set to improve the two countries’ competitiveness in global trade and help establish their positions as logistics hubs that serve as gateways to regional markets.

In April, the client awarded contracts for three civil works packages for the railway project linking Oman and the UAE.

The estimated AED5.5bn ($1.5bn) design-and-build contract was awarded to a consortium of Abu Dhabi-based National Projects Construction (NPC), National Infrastructure Construction Company, Tristar Engineering & Construction and Oman’s Galfar Engineering & Contracting.

NPC is the infrastructure development arm of the Abu Dhabi-based Trojan Construction Group, a subsidiary of local investment firm Alpha Dhabi.

OERC also awarded a separate contract for the rolling stock systems and integration contracts to German firm Siemens and Egyptian contractor Hassan Allam Construction.