The Dubai Department of Finance (DOF) has secured $675m in financing to complete the first phase of its $1.08bn Al-Sufouh tram project.
The finance facility includes a 13-year $401m loan, which will be paid off over ten years starting from 2015, and is guaranteed by the official government export credit agencies of Belgium (ONDD) and France's COFACE, according to Gulf News.
According to a statement from the DOF, the second portion of the loan is a six-year $274m Islamic Ijara facility, split equally in dollars and dirhams, and amortising over three years starting from 2015.
DOF director general Abdul Rahman Saleh Al Saleh said: "We have seen a very encouraging response to this financing, which is a testament to the strong confidence that international banks have in Dubai's economy, and the vision of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and ruler of Dubai."
"Through ECA [export credit agencies], we have been able to achieve long-term financing at competitive rates while continuing to efficiently manage the Emirate's finances," Al Saleh said.
Citigroup, Deutsche Bank and HSBC were mandated as lead arrangers and underwriters for the financing.
Earlier this month, a consortium consisting of Alstom and Cofely Besix Facility Management received a 13-year $160m maintenance contract from the Roads and Transport Authority (RTA) for the Al Sufouh tramway, which includes $90.61m for Alstom and $69.3m for Cofely Besix FM.
The Al-Sufouh tram project will span 14km along Al Sufouh Road, and after completion the tramway will be fed by underground power lines feeding the entire stretch, eliminating the need for overhead wires.
Phase one of the Al-Soufouh Tram project will see the construction of a 10km track starting from the Dubai Marina and running to the Knowledge Village.