Squire Patton Boggs Acts for Government of Dubai in US$2.5 Billion Infrastructure Financing

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Squire Patton Boggs recently completed acting on behalf of the government of Dubai in connection with its approximately US$2.5 billion financing for the Route 2020 project. The project consists of a 15km extension of the Dubai Metro’s Red Line from Nakheel Harbour and Tower Station to the Emirate’s Expo 2020 site.

The financing was advanced by a consortium of five lenders – Banco Santander S.A., First Abu Dhabi Bank PJSC, HSBC Bank Middle East Limited (and The Hongkong and Shanghai Banking Corporation Limited), Intesa Sanpaolo S.p.A. and Standard Chartered Bank – and completed in two phases. Phase 1, a conventional financing for approximately US$1.1 billion, was completed and announced publicly in September 2017. Financial closing on Phase 2, being an approximately US$1.42 billion facility backed by the French and Spanish export credit providers, Bpifrance Assurance Export S.A.S. and Compañia Española de Seguros de Crédito a la Exportación, S.A., Compañía de Seguros y Reaseguros, S.M.E. (CESCE) respectively, completed on March 20, 2018.

Construction on the project itself commenced in the final quarter of 2016, and official operation of the service will begin on May 20, 2020 – five months before the official opening of the Dubai Expo. As part of the project, up to 68 purpose-built trains will be purchased, with 15-20 for the Expo service and the balance to increase capacity on the Dubai metro system.

The project is being carried out by a consortium led by the French conglomerate Alstom, Spanish firm Acciona and Turkish company Gülermak. Alstom will supply the required trains and handle electromechanical works; the French Thales Group will provide technological systems; and Acciona and Gülermak will handle civil works on the project.

The capacity of Route 2020 is estimated at 46,000 riders per hour in both directions, according to studies commissioned by the Dubai Roads and Transportation Authority (RTA), the project operator. Route 2020 will include seven new stations, five aboveground and two underground, adding to the 47 stations already in the Dubai Metro system. It features an expansive airplane wing as the main design inspiration for each of the new stations. The project will also cover areas such as the Gardens, Discovery Gardens, Al Furjan, Jumeirah Golf Estates and Dubai Investments Park communities, serving about 270,000 residents and office workers.

This transaction was complex and represents one of the largest infrastructure financings in the Middle East. Squire Patton Boggs handled all aspects of the matter on behalf of the Dubai Department of Finance, including negotiations with the lenders and ECA providers and the settlement of all documentary requirements for the advance of the loans.

The work itself was conducted by a multinational team headed up by Dubai partner Douglas G. Smith and included Jay Gladis and Mark Gilligan (Abu Dhabi), Philippa Chadwick and Stephen Downey (London), Rafael Alonso and Manuel Mingot (Madrid), Véronique Collin (Paris) and James Duckworth, Tom Cerdan, Radwa Al Rifai, Leila Drissi and Leila Morad (Dubai).

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