Dubai Government secures $3bn for major airport expansion

The Dubai Government has pledged a major financing strategy that will see a major expansion of its two airports.

$3billion has been secured in long-term financing to be used for the expansion and development of Dubai International Airport and Al Maktoum International Airport.

Al Maktoum Airport is the emirate’s newest airport currently being developed on the edge of the region, with the long-term goal of becoming the primary airport into Dubai by 2025.

The deal includes a $1.63 billion, seven-year conventional loan and a $1.48 billion-equivalent, seven year ijara facility denominated in dirhams.

HSBC was on hand as a financial adviser to the deal, as well as twelve other international banks including Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Bank of China and Dubai Islamic Bank, to name a few.

The financing was raised by a consortium of Dubai state entities, comprising the Department of Finance, state-owned fund Investment Corporation of Dubai, and the Dubai Aviation City Corporation.

Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum in September 2014 approved a $32 billion investment to expand the emirate's new airport, with the aim of handling up to 120 million passengers a year by 2022.

Source: Reuters