(MENAFN) Bloomberg reported that Dubai is raising the second half of a 20 billion support fund that aims to help state-controlled companies during the global credit crisis and has issued a decree setting up a company to manage its proceeds.
The program will provide loans on a commercial basis to government and government-related entities executing projects of strategic and developmental importance, the emirate's Department of Finance said in an e-mailed statement today. The second 10 billion is in the process of being raised, a department spokesman said, speaking on condition of anonymity.
Dubai, the second-biggest of seven states that make up the United Arab Emirates, established the fund after the global credit crisis hurt its property, tourism and finance industries and shut access to company loans. U.A.E. Central Bank Governor Sultan bin Nasser al-Suwaidi said July 15 that the emirates may buy part of the bond offering after purchasing the first tranche in February.
The emirate's economy may contract between 2 percent and 4 percent this year, Standard & Poor's Ratings Services said on March 17. Home prices in Dubai have tumbled by about 50 percent from their peak and may drop another 20 percent this year.