Financial Close of Al Khazna Solar Project Strengthens UAE's Energy Transition and Long-Term Financing Partnerships

Abu Dhabi | EcoPulse24

The financial close for the 1.5 GW Al Khazna solar photovoltaic project has been finalized, advancing the implementation of the UAE’s clean energy strategy. The project, developed by Masdar in partnership with Engie, is backed by a diversified financing structure involving regional and international banks, supporting sustainable funding and demonstrating financial institutions’ confidence in the long-term value of renewable assets.

The financing consortium includes Abu Dhabi Islamic Bank, Crédit Agricole Corporate and Investment Bank, KfW IPEX, BNP Paribas, HSBC, Sumitomo Mitsui Trust Bank, Trust Bank, and Emirates Development Bank, providing a balanced foundation for the project. Masdar and Engie won the development tender in October 2025 and signed a 30-year power purchase agreement with Emirates Water and Electricity Company.

The project is scheduled to enter commercial operation in 2028, providing clean electricity to about 160,000 homes and reducing annual carbon emissions by more than 2.4 million tons. Located between Abu Dhabi and Al Ain, ownership is split 60% to Masdar and 40% to Engie.

Masdar stated the financial close is a turning point for the project, advancing the energy transition and strengthening institutional partnerships with Emirates Water and Electricity Company and Engie toward full operation and reliable clean energy supply. Engie emphasized the project aligns with its low-carbon infrastructure commitments and supports the UAE’s goal of climate neutrality by 2050. Emirates Water and Electricity Company described the project as a strategic asset for expanding renewable capacity to meet 60% of energy demand from clean sources by 2035.

Analysis
The deal reflects Abu Dhabi’s shift from renewable energy initiatives toward fully financed, long-term assets, enhancing financial stability and reducing execution risks. The combination of a long-term power purchase agreement and diversified financing supports scalability and energy security, reinforcing the emirate’s role as a regional hub for large-scale, low-carbon utilities and aligning with 2035 and 2050 targets without adding operational pressures.