Dubai hopes to finalise $2.5 billion in fundraising this year for a 15 km (9 mile) extension of its metro to the World Expo site and has already started construction, a government official told Reuters.

“I hope it will be before the end of this year as we’ve started construction,” Mattar al-Tayer, chairman and director general of Dubai’s Roads and Transport Authority, told Reuters in an interview this week.

He said the government had already made an advance payment of 600 million dirhams ($165 million) to a consortium of contractors including France’s Alstom, Spain’s Acciona and Turkey’s Gulermak.

Dubai’s Department of Finance, which is in charge of raising funds for the project, has been giving banks feedback on their bids for its financing, banking sources told Reuters separately. The sources declined to say whether banks had been mandated for the project yet.

The project, worth some $2.9 billion, will run up about $2.5 billion in debt. Of this, about $1.5 billion is backed by export credit agencies (ECAs) and the rest is a commercial loan, they added.

The agencies backing the financing are France’s Coface (COFACE) and Spain’s Compañía Española de Seguros de Crédito a la Exportación (CESCE), a source close to the situation said.

The commercial loan has a ten-year tenor, while the ECA-backed financing has a maturity of about 18 years, banking sources said. More info

By Reuters