Dubai: Dubai is on track to repay a $10 billion loan from Abu Dhabi as the emirate’s economy continues to recover, according to a senior Dubai government official.
The UAE central bank and the Abu Dhabi government gave $20 billion in loans to Dubai in late 2009 with a multi-billion-dollar debt restructuring at one of its flagship conglomerates.
Dubai had drawn on about $8.45 billion of the $10 billion Abu Dhabi facility due to mature in 2014, according to the Dubai government’s bond prospectus dated June 2011.
“We are on track to pay back Abu Dhabi... there is a date and we will meet the deadline for sure...in a couple of years,” Mohammad Al Shaibani, the chief executive of Investment Corporation of Dubai, told reporters at an event in Dubai on Sunday.
Dubai’s economy was under pressure as its key real estate sector went from boom to bust in the wake of the global financial crisis in 2008, but there are signs of recovery now, especially in the property market, which Shaibani expects will fully recover in three years’ time.
“Though we are not much immune from what is happening around us...we think we will be doing quite well in the coming period. The economy is strong, while the challenges that are happening will fade away, it just takes a bit of time,” he said.
Shaibani, who is also director-general of Dubai’s Rulers Court and a member of the emirate’s Supreme Fiscal Committee, added that government-related entities, or GREs, were managing their own business and meeting their obligations on time and that they needed no government bailout.
In terms of the issuing more bonds, Dubai’s government has no immediate needs, according to. Shaibani. “Any issuance would be based on need requirement, and not to move the market or any other purpose.”
