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King Abdullah Port secures $720m Islamic loan for planned expansion

King Abdullah Port secures $720m Islamic loan for planned expansion
King Abdullah Port (KAP) will add new container, ro-ro and bulk cargo terminals to its southern basin after securing a $720m Islamic bank loan to finance the planned second phase development of Saudi Arabia’s first fully privately owned port.

The strategically positioned Red Sea port unveiled the SAR 2.7bn ($720m) murabaha facility, with a tenure of 14 years, from Arab National Bank and Saudi Arabia British Bank on Thursday.

The second phase of KAP’s masterplan will double annual container capacity to 6m teu, ro-ro storage capacity to 600,000 vehicles and enhance its bulk cargo handling capacity to 3m tonnes. A portion of the loan will also be dedicated to the development of a logistics hub inside the port.

KAP’s well-documented expansion is tracking in line with increased demand at the port which has quickly established itself as a serious alternative to historic Jeddah Islamic Port which previously handled the bulk of Saudi Arabia’s cargo.

Container throughput in 2015 soared 73% to 1.3m teu while Japan ro-ro operator NYK has committed to two new ro-ro berths. The first phase of bulk and ro-ro cargo terminals is scheduled to be completed by early next year.

Engineer Abdullah Bin Muhammed Hameedadin, md at the Ports Development Company which owns and operates KAP, has overseen a number of key developments in the port’s short history including the opening of a fourth pier in May last year, raising container capacity to around 3m teu.

A new smart gate system is to be launched at the end of the year to complement the fully integrated Port Community System.

KAP occupies a total area of 16 sq km and is linked to King Abdullah Economic City’s Industrial Valley and bonded zone. Once complete, KAP will be able to handle 20m teu, 1.5m vehicles and 15 million tons of clean bulk cargo annually.

King Abdullah Port to tender second concession early 2016