Dubai today unveiled a sweeping US$10 billion (Dh36.7bn) rescue package from the Abu Dhabi Government that will allow Dubai World to deal with a slew of immediate financial obligations, including a $3.5bn Islamic bond that is due today.

Will the Palms Ever Be Completed?

The move ends months of speculation about how Nakheel, a developer owned by Dubai World, would pay off the sukuk amid declining property values and a slowdown in sales that left it virtually bereft of revenues.

It also represents by far the most direct and explicit support of Dubai to date by the Abu Dhabi Government in the wake of the financial crisis. The crisis battered property values in Dubai and slowed its ambitious growth plans as it struggled to find a solution to a crippling debt load that has been estimated at $85bn, a total greater than Dubai’s annual GDP…MORE