Dubai govt completes Route 2020 financing

dubai - The project will cost Dh10.6 billion

The government of Dubai's Department of Finance has announced the completion of the $2.45 billion, 17-year financing to complete the construction of Dubai Metro's Route 2020 extension project.

The project will cost Dh10.6 billion and envisages the construction of about 15-km extension of the Metro's Red Line from Nakheel Harbour and Tower station up to the site of the Expo, with 7 stations as well as an upgrade to the existing Metro network.

Expected to have significant social and economic benefits, the project will facilitate the passenger traffic, including Expo visitors, in the areas served.

The transaction consists of a 17-year $1,420 million loan supported by guarantees from the French export credit agency, Bpifrance Assurance Export S.A.S and the Spanish export credit agency (CESCE), amortising over 14 years commencing in 2020 and a 10-year conventional facility of $1,100 million, amortising over 6 years commencing in 2022.

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. The government of Dubai continues to examine ways to optimise its 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."

Banco Santander, First Abu Dhabi Bank, HSBC Middle East Limited, Intesa Sanpaolo S.p.A. and Standard Chartered Bank acted as mandated lead arrangers and facility providers for the financing.

The contract for the design and build for the project was awarded by RTA to a consortium of Alstom Transport, Acciona Infraestructuras and Gulermak.

- business@khaleejtimes.com