Dubai seeks $2.5b loans to expand metro for expo

Business Wednesday 21/September/2016 17:53 PM
By: Times News Service
Dubai seeks $2.5b loans to expand metro for expo

Dubai: Dubai is seeking $2.5 billion in loans to finance a 15-kilometre (9-mile) extension of its above-ground metro line to the World Expo site, according to two people with knowledge of the plan.
Banks submitted proposals this week to the emirate’s Department of Finance, including a $1.34 billion facility backed by European Export Credit (ECA) agencies, said the people, asking not to be identified because the information isn’t public yet. Lenders also bid for a $1.12 billion unsecured, commercial facility that is guaranteed by the Dubai government, they said.
Funding is expected to be provided mainly by international banks, the people said. The ECA-backed facility has a maturity of 18 years, while the commercial loan has a 10-year tenor, one of the people said.
Dubai’s Road & Transport Authority in June awarded a Dh10.6 billion ($2.9 billion) metro-rail contract to a consortium including France’s Alstom, Spain’s Acciona and Turkey’s Gulermak Agir Sanayi Insaat ve Taahhut. The project involves extending the line from the Nakheel Harbour and Tower Metro station to the Expo 2020 site located in the south of Dubai.
Alstom will supply 50 trains to the project, Thales will provide technological systems, while Acciona and Gulermak will build the project. Construction of the project is expected to begin in the fourth quarter.
Dubai’s government expects to double the number of visitors to the emirate to 20 million by the time of the international trade and tourism event. The city may spend about $8 billion on infrastructure projects, including hotels, new metro rail links and shopping malls. It’s also expanding its airports.
Dubai’s department of finance declined to comment.