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Mubadala reaches financial close on the Paris-Sorbonne university Abu Dhabi ppp project

Mubadala Development Company (Mubadala) and the Abu Dhabi Education Council (ADEC) today announced they have completed the non-recourse financing of the Paris-Sorbonne University Abu Dhabi public-private partnership (PPP) project. This deal marks the first time an Abu Dhabi Government-owned institution is being banked on long tenor on the strength and transparency of budgetary allocations.

A syndicate of international and regional banks is providing the US$323 million debt package with a 20 year tenor to this PPP project. The transaction successfully closed oversubscribed through mandated lead arrangers First Gulf Bank, Bank of Tokyo-Mitsubishi, BNP Paribas, Calyon, Royal Bank of Scotland and Sumitomo Mitsui Banking Corporation.

The deal is also the first transaction in UAE social infrastructure financing where international banks are taking performance risk on local contracting entities, highlighting their belief in the quality of the operating and contracting parties. The design and build contract has been awarded to an unincorporated joint venture between Al Habtoor Engineering Enterprises LLC and Murray & Roberts Contractors. John Buck International Properties LLC has been awarded the non-academic facilities management contract.

“This PPP financing deal is an important step forward for both Mubadala and the Abu Dhabi Government. Banks are relying on increasingly transparent budgetary processes for their credit risk,” said HE Khaldoon Al Mubarak, CEO of Mubadala. “We are pleased Mubadala has been validated as a valued sponsor. This deal will allow us to raise debt in a more efficient and fiscally responsible manner, and will encourage more private sector operators into the region.”

Education is a strategic priority for the Abu Dhabi Government and is at the centre of their efforts to improve and sustain the Emirates’ economic and social welfare. This project is strategically important to Mubadala and not only positions Abu Dhabi as a centre for educational and cultural excellence, it also sets an important benchmark for the development of future UAE social infrastructure projects.

“This partnership between the private and the government sector provides an opportunity for the governmental sector to harvest the private sector’s expertise in managing projects effectively,” said HE Dr. Mugheer Khamis Al Khaili, Director General, ADEC. “This approach enables us to concentrate on Abu Dhabi’s vision of developing education and matching its principles to international standards.”

The University is the Paris-Sorbonne University’s first campus outside France, and was also the first French institution of higher education in the Gulf region. In establishing the University, students from the UAE and the region will have local access to one of the world’s most prestigious and oldest universities.

The new campus on Al Reem Island, currently under construction, will feature approximately 93,000m2 of newly built, state-of-the-art teaching and recreational facilities, including accommodation for students. The first phase of the project will be completed in 2009.