The support fund "will provide loans on commercial terms" to government and government-related entities, according to Abdulrahman al-Saleh, director general of the Dubai Department of Finance.

"Each application for support will be assessed against predetermined criteria to ensure the funds are allocated efficiently and in accordance with Dubai's long-term growth strategy," says Al-Saleh.

"The fund will be working with the government-related entities and supporting them, but it will be on a commercial basis so that it's challenging for them to meet their obligations and to be able to manage their requirements in the long term."

The support fund will have responsibility for distributing the $10bn bond that Dubai raised from the Central Bank of the UAE in February.

The support fund will also have the ability to issue bonds or sukuk, and invest in projects or companies, hold and manage debt instruments on behalf of the Dubai government, collect loan repayments, and reinvest those revenues.

The Dubai Department of Finance, which supervises the fund, appointed the UK's Rothschild to act as adviser during the establishment of the fund in April.

The Dubai Supreme Fiscal Committee, established in October 2007, will have responsibility to approve loans and strategy.

The Supreme Fiscal Committee is made up of:

• Sheikh Ahmed bin Saeed al-Maktoum, chairman of the committee and president of the Department of Civil Aviation and chairman of Emirates