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Mon 7 Apr 2008 05:27 PM

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Dubai to borrow $4bn for infastructure development

Dubai set to begin roadshows for first tranche of medium-term note programme.

Dubai plans to borrow as much as 15 billion dirhams ($4.09 billion) to help finance development of its infrastructure, a government official said on Monday.

Dubai is set to begin roadshows for the first tranche of a medium-term-note (MTN) programme.

The size of the inaugural conventional issue had still to be determined, Sami Al-Qamzi, director general of Dubai's Department of Finance, said in an e-mailed statement to newswire Reuters.

The funds for the borrowing programme would be used for "general capital purposes and infrastructure development", Al-Qamzi said.

Emirates NBD and Standard Chartered Bank have been mandated as joint arrangers and lead managers for the Dubai government MTN programme, AL-Qamzi said.

The emirate will spend about 52.5 billion dirhams ($14.3 billion) over the next five years building roads, bridges and a metro network as the its population growth surges, Roads and Transport Authority (RTA) Chairman Mattar Al-Tayer said on March 31.

Dubai, a Gulf tourism and trade hub, is seeking to achieve economic growth of 11% per year to 2015.

According to London-based magazine Middle East Economic Digest (Meed), which tracks Gulf project announcements in the construction, industry, energy and power sectors, the UAE accounts for more than $1 trillion worth of projects.

Dubai, which boasts islands in the shape of palm trees and a ski slope in the desert, wants almost to triple its gross domestic product (GDP) to $108 billion by 2015, its ruler Sheikh Mohammed bin Rashid Al-Maktoum, also UAE vice president and prime minister, said last year.

In order to cope with traffic congestion, Dubai has built a floating bridge over the Dubai creek, the city's main waterway, and is building new bridges, roads and introducing a water transport system.

State-owned Dubai Electricity & Water Authority (Dewa) raised $2 billion in a syndicated loan earlier this year after delaying a bond sale in 2007 due to market conditions.

Dewa has said it plans to borrow as much as $19 billion over five years to feed the fastest growing appetite for power and water in the world. (Reuters)