DUBAI Jan 9 Dubai is finalising loans to fund
the expansion of Al Maktoum International Airport and the
building of its Expo 2020 exhibition centre, sources told
Reuters on Monday.
The government is due to get commitments from banks over the
next two weeks for a $3 billion loan to back the $35 billion
airport project, while the exhibition centre is estimated to
require total financing of around $7 billion, they said.
The $3 billion loan for the airport expansion is split
between a $2 billion conventional tranche and a $1
billion-equivalent, local-currency Islamic tranche, the sources
Banks participating in the transaction, coordinated by HSBC,
can commit funding across the two tranches, said one of the
sources, adding that the loan will have a seven-year maturity.
Dubai's department of finance was not immediately available
for comment on the loan plan. It represents the first financing
phase for the expansion of the Al Maktoum airport, which will
take 12 years to complete, the sources said.
Once expanded, the new airport will be the world's largest
passenger and cargo hub, with the capacity to handle more than
220 million passengers and 12 million tonnes of cargo per year,
the government said in a statement.
The Expo Dubai site, located near Al Maktoum airport, will
be financed by a combination of commercial bank debt and debt
guaranteed - or directly provided - by export credit agencies.
The commercial part of the financing could range between $2
and $3 billion, the sources said.
HSBC is coordinating the export credit agency-backed
financing of the project.
A spokesman for Expo 2020 declined to comment.
The fundraising exercise for Expo 2020 is not expected to
see major progress until February at the earliest as the
government is prioritising the financing of Al Maktoum airport.
Expo Dubai will be the first World Expo hosted in the Middle
East. Between October 2020 and April 2021, it is expected to
host 25 million visitors, according to the Expo 2020 website.
(Editing by Alexander Smith)