Qatar based AES Ras Laffan Holding and its joint venture partners have entered a Dh2.1 billion ($572 million) financing for the 750 MW - 40 MIGD power and desalination project with ten mandated lead arrangers.

The finance facilities comprise an 18-year term and standby loan totalling $572 million. The 20 per cent equity of the joint venture partners - AES Corp (55 per cent), Qatar Electricity and Water Corp (10 per cent), Qatar Petroleum (10 per cent) and Gulf Investment Corp (10 per cent) - will be contributed pro rata to the loan drawdown.

The mandated lead arrangers are ANZ Investment Bank, Arab Banking Corp, Barclays Capital, BNP Paribas, Gulf International Bank, HSBC Bank ME, Qatar National Bank, Societe Generale, the Bank of Tokyo-Mitsubishi, and Industrial Bank of Japan.

Allen & Overy advised the mandated lead arrangers on the project financing for Ras Laffan, the first independent power and water desalination project in the Gulf state. It will be undertaken on a build-operate-own-transfer basis, and will meet the power and water demand in Ras Laffan Industrial City and domestic demand.

The first power production is scheduled for March 2003, while full commissioning will be in May 2004.

"The events of September 11 in the U.S. presented the Ras Laffan project with an uniquely challenging set of issues affecting the international banking as well as reinsurance market," said Tabish Gauhar, AES project director.

"With the help and active support of the Qatar Government and international and regional banks, we are pleased to have closed the project without delay or other adverse implications."

For AES, this is the second project in the Middle East, and follows the AES Barka power and desalination project in Oman earlier this year.

"The Ras Laffan project is important for AES in the region. We are thankful to the Qatar Government for giving us the opportunity," added Dennis Bakke, AES president and chief executive.