The Dubai Government will probably help property developer Nakheel repay a $3.52 billion (Dh12.9bn) Islamic bond due this year as it qualifies for assistance under a $10bn support programme.

"There is a criterion that has to be met, and if that happens we will support any government-related entity," Nasser bin Hassan Al Shaikh, Director-General of Dubai's Depart?ment of Finance, said in an interview at the World Economic Forum at the Dead Sea, Jordan. Nakheel meets the criterion, he added.

The finance department issued a $20bn bond earlier this year and sold half of it to the UAE Central Bank. Nakheel has already received funds from Dubai's support programme to help it cope with the financial slump. The government will lend from its support fund if a company's "business model is sustainable and if its cash flow supports the interest payment and there is a repayment plan for the principal", said Al Shaikh.

The Dubai Government has received interest from SWFs and international banks for the second tranche of its $20bn bond, which it plans to sell this year, he added.

Al Shaikh said Dubai will transfer the bond receipts to a separate legal entity. The support fund's legal structure and where it will be based will be announced "in a month's time", he said. "There are various options we are considering, and it could also be a decree company."

The "preference" is to use money from the fund to lend to government-related firms though it could also be used to invest in equity. Emaar has not applied for help from the fund, Al Shaikh said.

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