The Government of Dubai's Department of Finance (DoF) on Wednesday announced the successful completion of a 17-year financing of AED9 billion, to complete the construction of Dubai Metro's Route 2020 extension project.
The project will cost AED10.6 billion and envisages the construction of about 15 km extension of the Dubai Metro's Red Line from Nakheel Harbour and Tower station up to the site of the Expo, with seven stations as well as an upgrade to the existing metro network.
Expected to generate significant social and economic benefits, the project will facilitate the passenger traffic, including the Expo visitors in the areas served.
The transaction consists of a 17-year AED 5.2 billion loan supported by comprehensive guarantees from the French export credit agency, Bpifrance Assurance Export S.A.S (BPIAE) and the Spanish export credit agency (CESCE), amortising over 14 years commencing in 2020 and a 10-year conventional facility of AED4 billion, amortising over six years commencing in 2022.
Commenting on the transaction, Abdulrahman Saleh Al Saleh, DoF Director General, said, "The encouraging response received for this financing, illustrates the strong confidence of international banks in Dubai’s economy and the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, the Vice President, Prime Minister and Ruler of Dubai. The Government of Dubai continues to examine ways to optimise its funding strategy; Expert Credit Agency (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."
Banco Santander S.A, First Abu Dhabi Bank, HSBC Middle East Limited, Intesa Sanpaolo S.p.A. and Standard Chartered Bank acted as mandated lead arrangers and the facility providers for the financing.
The contract for the design and build for the Project was awarded by Road and Transport Authority to a consortium of Alstom Transport S.A. (Alstom), Acciona Infraestructuras SA and Gulermak.