Gulf News reported that HSBC has signed USD 435 million long term facility to finance a steel plant and rolling mill supplied by Danieli one of the world's top three steel plant suppliers to Hadeed, a wholly owned subsidiary of Saudi Basic Industries the world's largest petrochemical company by market capitalization, profits and total assets and the largest listed company in the Gulf Cooperation Council market.

The new plant located in Jubail in the Eastern Province of Saudi Arabia will produce 1 million tonnes per year of pellets and half a million tonnes of rebar. With a total production capacity of 6 million tonnes, Hadeed will now be able to use their rolling mills at full capacity without relying on imported steel. Production from the new steel plant is expected to commence in the second half of 2012.

According to data provider Dealogic, this long term financing is insured by the Italian government's Export Credit Agency Sace. Sace's primary role is to enhance Italian companies' competitiveness abroad. HSBC arranged more ECA backed loans than any bank in the Middle East in 2010.

Mr Olivier Khalife who led the deal in HSBC's project and export finance team said that "Steel consumption in Saudi Arabia has rapidly surged over the past few years on the back of a construction boom and growing investment in infrastructure. With this new Danieli equipment, Hadeed which is the largest steelmaker in the Mena region will be able to provide Saudi Arabia and the wider region with very high specification wire rod products which will domestically meet the needs of ongoing and planned projects. This major Sace-supported financing in the kingdom emphasizes yet again the continued importance and attraction of long-term ECA finance to GCC borrowers for the financing of significant capital expenditure. This deal comes after the USD 500 million Emirates Steel International financing in Abu Dhabi.”

(Sourced from Gulfnews.com)