Dubai raises $675M for tram project

Dubai raises $675M for tram project

Dubai's department of finance raised $675 million from a dual-currency loan to complete the first phase of its Al-Sufouh tram project in the emirate.

February 23, 2012 11:25 by Reuters

The facility comprises a 13-year $401 million loan which will amortize over 10 years starting 2015, the media office of Dubai government said in an email statement on Wednesday.

The loan is guaranteed by the official government export credit agencies of Belgium (ONDD) and France (COFACE).

The second portion of the loan is a six-year $274 million Islamic Ijara facility amortizing over three years starting 2015. The facility is split equally in dollars and dirhams.

Citigroup, Deutsche Bank, and HSBC were mandated as lead arrangers and underwriters for the financing, the statement said.

The first phase of the Al-Soufouh Tram project will see the construction of a 10km-long track starting from Dubai Marina and running all the way to the Knowledge Village.

Liquidity woes had delayed the progress of the project as Dubai’s Roads and transport Authority (RTA) struggled to meet payment in the wake of the global slowdown. The tram was initially scheduled for completion in 2011.

Dubai also closed a $800 million financing deal with lenders based on securitising road toll receipts in July last year. The dual currency, six-year financing was expected to support RTA’s infrastructure projects. (Reporting by Praveen Menon; Editing by Dinesh Nair) *image from flashydubai.com