Gems Education has raised a Dh2 billion bank loan to help it deliver its target of building ten new schools in the UAE over the coming two years.
Dubai's Gems raises Dh2bn for schools
Gems Education has raised a Dh2 billion (US$544,550) bank loan to help it to build 10 schools in the UAE in the next two years.
The announcement comes as education providers race to keep up with rising demand for school places across the country.
"Recently we announced our intention to build 10 new schools in the UAE over the next two years to meet growing demand and the quality targets set by the local authorities," said Dino Varkey, the chief operating officer of Gems. "This new bank facility supports this expansion plan and Gems Education commitment to meet the needs of the sector."
Gems, a private education group whose roots in the UAE date back to 1959, has grown to become one of the largest providers of schooling in the country.
The financing facility has a tenor of six years and includes both Islamic and conventional tranches. The cash will be used to refinance investments in schools made over the past three years and provide additional funds for investment in new schools in the UAE and the wider Middle East North Africa region, it said.
The education sector is striving to boost the supply of school spaces.
The cost of education rose by almost 6 per cent last month compared with the same period last year, data released on Saturday by the National Bureau of Statistics showed. The scale of the rise was above the overall 1 per cent jump in inflation across the consumer price index.
Abu Dhabi Islamic Bank, Mashreq, Dubai Islamic Bank and Noor Islamic Bank are the mandated lead arrangers and book runners for the financing, with United Arab Bank participating in the facility, Gems said.
"Their support is a strong endorsement of the strength and resilience of the education sector and the economy more broadly," Sunny Varkey, the founder and chairman of Gems Education, said of the banks' support.
Gems said last October it would open 10 new schools with capacity for 33,000 pupils within the next two years.
The schools, following the British Indian, International Baccalaureate, American and dual curricula, will open this year and next. They will be built in the capital, Dubai and Ras Al Khaimah.
In an effort to better control education fees, authorities have put caps on how much providers can raise charges. Westminster School in Dubai, operated by Gems, was due to close its doors next year because it could not operate profitably. Dubai Knowledge and Human Development Authority had allowed only a 3 per cent increase in school fees because Westminster was rated only "acceptable" in each of its last four inspections.
But Gems said this month it had scrapped its closure plans and was awaiting a decision by the authority to keep the school open without raising its fees.
Gems said it also planned to establish a leadership academy and teacher training centre in Dubai.