Dubai's Department of Finance on Wednesday said it closed $2.45 billion (Dh9bn) in long-term financing to fund the construction of Dubai Metro’s Red Line extension that will serve the Expo 2020 site.
The financing package for the 15-kilometre Route 2020 project was backed by European export credit agencies and was arranged by a group of local and international lenders, the DoF said in a statement.
The deal consists of a 17-year $1.42bn loan, supported by guarantees from the French export credit agency, Bpifrance Assurance Export and the Spanish export credit agency. The facility amortises over 14 years commencing in 2020. The other tranche is a 10-year $1.1bn conventional facility, amortising over six years and commencing in 2022, it said.
Spanish lenders Banco Santander and Intesa Sanpaolo along with First Abu Dhabi Bank, HSBC Middle East, and Standard Chartered were the mandated lead arrangers and the facility providers for the financing, DoF added.
The Dubai government is spending billions of dollars on infrastructure development for the Expo, which is forecast to welcome 25 million visitors during the six-month global trade fair.
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"The encouraging response received for this financing illustrates the strong confidence of international banks in Dubai’s economy,” Abdulrahman Al Saleh, DoF’s director general, said. “The Government of Dubai continues to examine ways to optimise it's funding strategy; ECA financing has been a good example of this strategy and we have been able to achieve long term financing at competitive rates while at the same time allowing us to manage our budget proactively and in a fiscally responsible manner."
The contract for the design and construction of the project was awarded by the Roads and transport Authority in June 2016 to a consortium of France's Alstom Transport, Spain's Acciona Infraestructuras and Turkey's Gulermak.
