March 21, 2018 / 2:20 PM / a month ago

UPDATE 1-Dubai completes $2.45 billion project financing for metro extension

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DUBAI, March 21 (Reuters) - The government of Dubai has completed a project financing worth about $2.45 billion for the extension of the city’s metro rail system, Dubai’s Department of Finance said on Wednesday.

The project envisages a 15 kilometre (9 mile) extension of the Dubai Metro’s Red Line, from Nakheel Harbour and Tower station up to the site of the World Expo, which the city will host in 2020.

The metro extension is one of a number of significant infrastructure projects linked to the development of the Expo exhibition centre.

Dubai is also expanding the Al Maktoum International Airport, for which it borrowed $3 billion last year and on which it plans to invest roughly $35 billion in total.

The metro extension financing comprises a $1.42 billion 17-year loan backed by guarantees provided by French and the Spanish export credit agencies, and a $1.1 billion 10-year loan provided by commercial banks.

Banco Santander, First Abu Dhabi Bank, HSBC Middle East, Intesa Sanpaolo, and Standard Chartered Bank arranged and provided the financing, Dubai’s Department of Finance said in a statement.

The loan guaranteed by the agencies amortises over a 14-year period starting in 2020, while the conventional loan amortises over a six-year period starting in 2022.

Reporting by Davide Barbuscia, editing by Louise Heavens

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