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UAE-based Prime Terminal and India's Infrastructure Leasing & Financial Services Limited (IL&FS) are set to invest Dh477 million (US$130 million) in an oil storage terminal in Fujairah, according to Gulf News.

IL&FS Prime Terminals, a joint venture formed between IL&FS Maritime Infrastructure Company Limited (IMICL) and PTF, reached an agreement on the first phase of the 632,678 cubic metres terminal construction project. The land has been obtained on a 50-year lease from the Fujairah government.

Four local and Indian banks led by Bank of Baroda will provide $91 million in finance for the project for a tenor of seven years. National Bank of Fujairah, EXIM Bank of India and ICICI Bank are the other lenders. IL&FS Global Financial Services (ME) Limited acted as financial advisors for the project.

Shahzaad Dalal, Chairman and CEO of IL&FS Investment Advisors told Gulf News that he expects a full return on the investment within eight to 10 years.

"The main construction package is currently in tendering phase. Three consortia have placed bids for the project," Dalal commented.

Owned 80 per cent by IMICL and 20 per cent by PTF, the oil storage tank terminal project at Fujairah will have a total capacity of 632,678 cubic meters, of which 333,088 cubic meters will be implemented in the first phase. The contruction phase is expected to be completed in 24 months.

The project is located within the Fujairah Zone for the petroleum industry, adjacent to the port of Fujairah. The project will have 14 storage tanks and support facilities and will be operated by IMICL.

"This project marks an important step for IL&FS which seeks to expand its expertise in developing, executing and managing BOT infrastructure projects in the fast growing Middle Eastern and African markets. As there is a great need to develop infrastructure in these regions, many governments are turning to experienced private sector players, who can efficiently implement projects." Dalal said.