London's Battersea Power Station redevelopment project has secured a sharia-compliant syndicated loan of 467 million pounds ($754 million), a step towards developing Britain as an Islamic finance centre.
The loan, one of the largest Islamic transactions ever conducted in the British market, is part of a 1.35 billion pound financing package for the second and third phases of the project, Malaysia's Maybank Islamic Bank said on Wednesday.
Maybank Islamic provided 200 million pounds of the Islamic loan while the rest was split between Malaysia's CIMB Bank and Standard Chartered Bank. Details of the loan were not revealed.
The deal could encourage other corporations in Britain to seek sharia-compliant financing, said Muzaffar Hisham, Islamic banking chief executive at Maybank Islamic.
"We hope this opens the floodgates...This shows how the advancement of cross-border transactions is very important."
Owners of the firm behind the 10 billion pound redevelopment of the site on the south bank of the Thames include Malaysian institutions Employees Provident Fund, SP Setia and Sime Darby.
Seeking to attract more Islamic financial business, Britain issued in June its first sovereign sukuk (Islamic bond), worth 200 million pounds.
The market is poised to see other new government initiatives, including a multi-currency sukuk guarantee from Britain's export credit agency aimed at a customer of European plane maker Airbus.
The Bank of England will start a feasibility study next year to develop a sharia-compliant liquidity management tool for Islamic banks to use, according to Andrea Leadsom, a junior British Treasury minister. (1 US dollar = 0.6197 British pound) (Reporting by Praveen Menon and Bernardo Vizcaino;