Dubai Metro extension financial close

23 Mar 2018

UAE: Financial close for Phase 2 of the Route 2020 project to extend the Dubai Metro’s Red Line by 15 km from Nakheel Harbour & Tower to the Expo 2020 site was achieved on March 20.

Banco Santander, First Abu Dhabi Bank, HSBC Bank Middle East, Intesa Sanpaolo and Standard Chartered Bank acted as mandated lead arrangers and facility providers.

The Phase 1 conventional financing of US$1·1bn was completed in September 2017, comprising a 10-year facility of 4bn dirham amortising over six years from 2022.

Phase 2 of the financing comprises a 17-year 5·2bn dirham loan supported by guarantees from French export credit agency Bpifrance Assurance Export and Spanish export credit agency CESCE, amortising over 14 years from 2020.

Squire Patton Boggs acted on behalf of the government of Dubai in closing the ‘complex’, transaction, which it said was one of the largest infrastructure financing deals in the Middle East.

Director General of Dubai’s Department of Finance, Abdulrahman Saleh Al Saleh, said the ‘encouraging response’ to the financing illustrated ‘the strong confidence of international banks in Dubai’s economy’. He said the government ‘continues to examine ways to optimise its funding strategy’, and export credit agency financing had helped 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’.

The metro extension is being built by the Expolink consortium of Alstom and civil works contractors Acciona of Spain and Gülermak of Turkey under a design and build contract awarded by Dubai’s Roads & Transport Authority in 2016. Thales is providing signalling systems. Construction got underway at the end of 2016, and services are scheduled to start on May 20 2020, five months before the opening of the Dubai Expo. 

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