{"id":148796,"date":"2026-09-04T12:56:05","date_gmt":"2026-09-04T12:56:05","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=148796"},"modified":"2026-09-04T13:44:56","modified_gmt":"2026-09-04T13:44:56","slug":"uae-project-finance","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/uae-project-finance\/","title":{"rendered":"United Arab Emirates: Project Finance"},"content":{"rendered":"<p><span data-contrast=\"auto\">This article focusses principally on financing considerations under the laws of the United Arab Emirates (the \u201c<\/span><b><span data-contrast=\"auto\">UAE<\/span><\/b><span data-contrast=\"auto\">\u201d), with experience principally rooted in English law project financing transactions in Abu Dhabi and Dubai but separately recognises the growing importance of the regimes of the other Emirates and the more recent Abu Dhabi Global Markets (\u201c<\/span><b><span data-contrast=\"auto\">ADGM<\/span><\/b><span data-contrast=\"auto\">\u201d) and Dubai International Finance Centre (\u201c<\/span><b><span data-contrast=\"auto\">DIFC<\/span><\/b><span data-contrast=\"auto\">\u201d) to the energy and infrastructure sector in the UAE.\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n","protected":false},"template":"","class_list":["post-148796","comparative_guide","type-comparative_guide","status-publish","hentry","guides-project-finance","jurisdictions-uae"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">King &amp; Spalding LLP<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/05\/Logo_standard_RGB_Brown.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">King &amp; Spalding LLP<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/05\/Logo_standard_RGB_Brown.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Project Finance laws and regulations applicable in United Arab Emirates<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the typical ownership structures for project companies in your jurisdiction? Does this vary based on the industry sector?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><span data-contrast=\"auto\">In the UAE, project company ownership structures are shaped by a combination of legislation, public procurement processes for large-scale projects, and project financing bankability requirements. For strategic alliances, company formation and shareholder rights depend on the different partners\u2019 roles, the relevant companies law, and, commonly, any bid process parameters.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">For procurer-led projects, equity documentation includes UAE constitutive documents and a shareholders\u2019 agreement setting out respective local and international ownership obligations for the duration of the project as well as typical shareholder obligations and governance parameters. This is supplemented by a direct agreement with financiers which stipulates equity funding obligations, share retention rules, and permitted transfers. Equity for projects is typically funded through a mix of pure equity, subordinated shareholder loans, and equity bridge facilities. The same is true of private sector-led projects.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">In the years prior to 2015, project companies were typically incorporated in the form of joint stock companies requiring majority local ownership and, whilst still very much Emirate dependent, single and multi-shareholder limited liability companies have been more prevalent since that time owing to Federal Law No. 2 of 2015 on Commercial Companies and subsequent Federal Decrees. Law No. 32 of 2021 (the \u201c<\/span><b><span data-contrast=\"auto\">Commercial Companies Law<\/span><\/b><span data-contrast=\"auto\">\u201d).\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The Commercial Companies Law generally allows up to 100% foreign ownership outside certain strategic areas (banks, telecoms, defence and the like). Each of the Emirates can further determine if any categories of commercial or industrial activities are subject to foreign ownership restrictions. Specific categories of companies also can exempt themselves from the Commercial Companies Law and its provisions in order to set their own corporate governance rules<\/span><span data-contrast=\"auto\">1<\/span><span data-contrast=\"auto\">:<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"-\" data-font=\"Calibri\" data-listid=\"15\" data-list-defn-props=\"{&quot;335551671&quot;:0,&quot;335552541&quot;:1,&quot;335559685&quot;:1440,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Calibri&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;-&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"0\" data-aria-level=\"1\"><span data-contrast=\"auto\">wholly owned by federal or local government or any of their institutions, entities or subsidiary companies (and subsidiaries thereof); and<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"-\" data-font=\"Calibri\" data-listid=\"15\" data-list-defn-props=\"{&quot;335551671&quot;:0,&quot;335552541&quot;:1,&quot;335559685&quot;:1440,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Calibri&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;-&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">engaging in the business activities of oil drilling, extraction, refining, manufacturing, marketing, transportation or engaging in any energy-related activities in the energy sector (in all its forms), or in electricity generation, gas production and water desalination, transmission and distribution, in which federal or local government entities directly or indirectly contribute at least 25% of capital.\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">General partnership companies and limited partnership companies are the other forms of company recognised by the Commercial Companies Law.\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any corporate governance laws or accounting practices that foreign investors in a project company should be aware of?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><strong>Corporate Governance:<\/strong> The UAE has developed legal and accounting systems promoting transparency and robust regulation to attract foreign investment:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>The Commercial Companies Law provides a robust corporate governance framework, regulating board composition, directors\u2019 duties, shareholder rights, and disclosure obligations. It also provides the foundations for the multi-staged formation process, governance and dissolution of two types of joint stock companies, being Public Joint Stock Companies (\u201c<strong>PJSCs<\/strong>\u201d) and the Private Joint Stock Companies (\u201c<strong>PSCs<\/strong>\u201d).<\/li>\n<li>Corporate governance regulations are applicable to JSCs. Listed company entities are regulated by the Capital Market Authority (\u201c<strong>CMA<\/strong>\u201d), which came into being through Federal Decree Law No. 32 of 2025 and replaced the UAE Securities and Commodities Authority (\u201c<strong>SCA<\/strong>\u201d). Project companies are not listed vehicles.<\/li>\n<li>From a regulation perspective, the limited liability companies incorporated as independent power producers are typically regulated by the economic department of the relevant Emirate and onshore JSCs are primarily regulated by the Ministry of Economy, while mainland financial institutions in the UAE are overseen by the Central Bank.<\/li>\n<li>Companies in free zones (including ADGM and DIFC) are subject to separate regulatory regimes, often based on common law principles, with distinct corporate governance codes and reporting requirements.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>Accounting Practices:<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li>The UAE mandates International Financial Reporting Standards (\u201c<strong>IFRS<\/strong>\u201d) for listed entities, large corporations, and financial institutions to ensure transparency and comparability, as required by Article 239 of the Commercial Companies Law and consistent with international accounting practices and standards.<\/li>\n<li>Companies must prepare annual financial accounts (with balance sheet and profit and loss account) and public joint stock companies as well as LLCs are required to undergo an annual audit by a statutory compliant auditor. The financial year typically aligns with the calendar year.<\/li>\n<li>PJSCs must have an independent internal audit function and an audit committee of independent directors to ensure effective risk management and approach to governance, but as noted above, this is of limited relevance to the usual project company in a project financing context.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>AML Regime:<\/strong> there have been significant developments in this area over the past five years:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>Federal Decree Law No. 26 of 2021 amended prior legislation, clarifying business obligations regarding anti-money laundering and expanding the roles and penalties enforced by supervisory bodies.<\/li>\n<li>In February 2024, the Financial Action Task Force (\u201c<strong>FATF<\/strong>\u201d) removed the UAE from its grey list, recognizing the country\u2019s implementation of the FATF action plan.<\/li>\n<li>As a result of these efforts, the UAE now has a dedicated Executive Office to Combat Money Laundering and Terrorist Financing, a specialist court, and enhanced AML\/CFT guidelines and a new Penal Code to support the existing legislative and regulatory framework.<\/li>\n<li>Federal Decree Law No. 10 of 2025 is the most recently implemented anti-money laundering law in the UAE, which came into effect on 14 October 2025 and repealed and replaced the prior 2018 law. This further demonstrates UAE\u2019s commitment to bringing its anti-financial crime legislation in line with the FATF global standards. The scope of changes introduced by this legislation include new reporting obligations, more detailed analysis of beneficial ownership disclosures, sanctions screening and significant changes such as new criminal classifications.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If applicable, what forms of credit support from sponsors or host governments are typically provided?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As for many other jurisdictions, a range of credit support mechanisms may be provided by sponsors and, in certain cases, host governments in the UAE, as an underlying basis for the bankability of a project financing.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Sponsor Support: <\/strong>This varies by bid or transaction phase and includes mechanisms common in project finance structures around the world:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>Bid phase:<\/strong> in a competitive bidding context:<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>equity commitment letters to provide certainty over deliverability of the transaction, which will need to be coupled with commitment letters from the financing institutions who will be co-funding the project to show ability to meet all project costs; and\/or<\/li>\n<li>a bank guarantee or bid bond to assure that the equity provider is committed to the project if awarded successful bidder.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>Construction phase:<\/strong> during the construction of a project:<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>Credit support for equity contribution obligations, typically via letters of credit issued by acceptably rated banks or parent company guarantees provided by affiliated entities of sufficient financial standing, to cover both committed base equity and any standby equity for cost overruns and with different triggers for the ability to call thereon; and<\/li>\n<li>Completion guarantees from sponsors as <em>may<\/em> be required for novel or high-risk projects to ensure the project reaches completion, however, this is less common in the UAE\u2019s mature market where non-recourse structures are more usually implemented.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>During the operating phase:<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>Lenders typically require debt service, maintenance and refinancing reserves though these can be funded through a number of means (i.e. not simply as sponsor credit support). These are held as cash in secured accounts or backed by credit support, such as letters of credit or sponsor guarantees, in each case fulfilling the requisite ratings or financial standing requirements.<\/li>\n<li>As is common in other jurisdictional contexts, lenders can also require O&amp;M guarantees to stand behind the operations and maintenance obligations of the project company counterparty.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>Host Government Support: <\/strong>Particularly in projects of strategic national importance or in sectors such as energy, infrastructure, or utilities, lender-facing government support will vary from Emirate to Emirate but most likely takes the form of:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>a direct agreement with lenders covering the key revenue-generating contract, related credit support, and protections against risks like change in law or currency inconvertibility; and<\/li>\n<li>Credit support to back payment obligations under any government-facing revenue contract, in the form of a guarantee from the relevant Emirate Government or Federal Government for federal projects. In some projects, this may be structured as a minimum revenue guarantee or guarantee of availability payments, but this practice does differ from Emirate to Emirate, with the Abu Dhabi Government entities typically continuing to provide such guarantees for procurer-led projects, and with the Emirate of Dubai having discontinued this practice as of writing.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>As for any project financing, the availability and scope of any credit support from both the Sponsors and the Government will ultimately depend on multiple factors including (i) the specific project structure, (ii) the identity, experience, and credit strength of the sponsors, (iii) the sector in which the project operates, and (iv) the Emirate in which the project is located.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What types of security interests are available (and suitable) for a project financing in your jurisdiction? Are direct agreements used?\u00a0<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Project financiers require a comprehensive first-ranking security package over all project company rights and assets, including contracts, ownership interests, shareholder loans, and physical assets. The UAE market is well-accustomed to providing these security structures. Non-UAE jurisdiction security will be taken over any assets that are subject to the laws of such non-UAE jurisdiction.<\/p>\n<p>&nbsp;<\/p>\n<p>Security interests will be granted in favour of an agent appointed to act on behalf of the relevant lender group, which will be split between an onshore and offshore agent to the largest extent possible. There are certain types of security interest that are required as a matter of Emirati law to be held by a UAE licensed bank. Careful consideration must also be given where Islamic financing structures are being employed as part of a multi-sourced financing solution, as those structures will need to be Shariah compliant.<\/p>\n<p>&nbsp;<\/p>\n<p>Different types of security can be granted under UAE law, and the type will depend on the nature of the asset over which the security interest is being taken, as per the below:<\/p>\n<p>&nbsp;<\/p>\n<table width=\"623\">\n<thead>\n<tr>\n<td width=\"108\"><strong>Type of Security<\/strong><\/td>\n<td width=\"258\"><strong>Asset \/ Contract<\/strong><\/td>\n<td width=\"258\"><strong>Other commentary<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td width=\"108\">Guarantee<\/td>\n<td width=\"258\">&#8211;\u00a0\u00a0\u00a0 Payment obligations of the procurer.<\/td>\n<td width=\"258\">&#8211;\u00a0\u00a0\u00a0 See response to question 3 regarding the scope of such guarantees.<\/td>\n<\/tr>\n<tr>\n<td width=\"108\">Pledge<\/td>\n<td width=\"258\">&#8211;\u00a0\u00a0\u00a0 Shares in the project company and, depending on the structure, also shares in the immediate shareholder(s) and all related rights.<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0 Project accounts.<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0 Movable assets, being all assets that are not classified as immovable (plant, work, machinery, tools, tangible and intangible assets, movable fixtures etc).<\/td>\n<td width=\"258\">&#8211;\u00a0\u00a0\u00a0 Share pledge practices differ between Emirates so local law advice should be sought.<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0 Amounts standing to the credit of accounts now or in the future are capable of being pledged.<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0 Tangible and intangible assets are pledged under Federal Law No. 4 of 2020 on Securing Interests in Movable Property (the \u201c<strong>Movables Security Law<\/strong>\u201d), which permits pledging of current and future assets.<\/td>\n<\/tr>\n<tr>\n<td width=\"108\">Real Property Mortgage<\/td>\n<td width=\"258\">&#8211;\u00a0\u00a0\u00a0 Buildings, leasehold interest in real property, new buildings constructed on land.<\/td>\n<td width=\"258\">&#8211;\u00a0\u00a0\u00a0 Practices for Real Property security differ Emirate to Emirate so local law advice should be sought.<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0 Mortgages over real property must be in writing and registered.<\/td>\n<\/tr>\n<tr>\n<td width=\"108\">Assignment<\/td>\n<td width=\"258\">&#8211;\u00a0\u00a0\u00a0 Project company rights in key onshore project contracts (including guarantees, LCs, performance bonds, and shareholder subordinated loans), insurances, other receivables streams, local project consents and onshore project accounts.<\/td>\n<td width=\"258\">&#8211;\u00a0\u00a0\u00a0 Receivables can be assigned regardless of contractual restrictions. Offshore security (e.g. English law) is also common eg an offshore reinsurance assignment deed.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p>While international lenders prefer to move as much security as possible offshore to longer established and tested jurisdictions (e.g., English and NY law), the UAE offers alternatives, such as establishing project accounts in the DIFC. The DIFC and ADGM, being common law jurisdictions, provide a broader range of security instruments, including debentures and charges, under their own specific laws but to date, there have been a limited number of examples where such DIFC and ADGM security structures have been employed.<\/p>\n<p>&nbsp;<\/p>\n<p>In addition to the very standard all asset security, project financings in the UAE, as for elsewhere, include direct agreements in respect of the material project agreements, which provide lenders with step-in rights enforceable against key project counterparties in the event of project company breach or where counterparty suspension or termination rights may otherwise arise under material project agreements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are the above security interests perfected?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the UAE, the perfection of security interests depends on the asset type and whether the security is taken onshore or within a free zone like the DIFC or ADGM<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>For onshore UAE, security over movable assets is typically perfected by registration with the Emirates International Registry of Collateral (EIRC) in accordance with Federal Law No. 4 of 2020 on Securing Rights in Movable Property;<\/li>\n<li>Security over immovable property, such as leasehold interest or buildings, is perfected by registration with the relevant land department in the Emirate where the property is located;<\/li>\n<li>For shares in UAE companies, perfection is achieved by noting the security interest in the share register of the company and, where applicable, registration with the relevant authority (such as the Department of Economic Development or the free zone authority);<\/li>\n<li>Bank account pledges and assignments should also be registered in the EIRC; and<\/li>\n<li>In the DIFC and ADGM, which operate under common law-based regimes, perfection is typically achieved by registration of the security interest in the respective security registers maintained by these jurisdictions.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>It is essential for clients to obtain specific local law legal advice in these scenarios as the registration process is essential to establish priority over any other unregistered interests and to protect such interests through enforceability against third parties, all of which becomes increasingly important in an insolvency scenario of the project company.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please identify how security is enforced (notably the enforcement options available for secured parties) both pre and post insolvency\/bankruptcy of the project company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Enforcement rights over security will arise by virtue of the negotiated project specific event of default provisions of the relevant loan agreement or common terms agreement and will differ depending on the form of collateral. When an event of default has arisen, the requisite lender majority will be entitled to vote to decide what action to take. Their options will typically include a combination of (i) accelerating the outstanding loans so that they become due and payable or due and payable on demand, (ii) blocking of accounts such that the project company no longer has any rights in respect thereof, and the appointed agent is able to direct the cashflows (and use monies standing to the credit of the account to settle any outstandings), (iii) step-in, substitution or novation rights to be exercised with respect to the project company under the direct agreements, (iv) partial or full enforcement of security, and (v) ability for a lender representative to step in on current insurance claims and directly apply funds. This mechanism is no different in the UAE from other English law project financings but there are some critical differences in enforcement in the UAE relative other jurisdictions, including that no receivership regime exists meaning that direct enforcement of security by the relevant agent is required.<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>Pre-insolvency: <\/strong>In the UAE, the enforcement of security interests is governed by a combination of federal and local laws, as well as the specific regulations of the free zones such as the DIFC and ADGM. Enforcement options for movable security include the standard options of private sale, or court-ordered sale of the secured assets by public auction. UAE law is generally more restrictive than other jurisdictions with regards to the ability for lenders to enforce security, and certainly has not yet established any long track record for doing so, but with the Movables Security Law in place, it is possible pre-insolvency for secured parties to take enforcement action outside of the local courts for movable security provided that certain process is followed, namely:<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>(i)\u00a0 The relevant pledgor (and any pledged entity) is to be notified of intent to enforce rights within a specified period (not less than 7 working days);<\/p>\n<p>(ii)\u00a0 The form of sale or disposal is to be specified including whether on a unilateral or group basis, and whether public or private auction; and<\/p>\n<p>(iii)\u00a0 The proceeds are to be applied to discharge the underlying secured liability after deducting reasonable expenses, with surplus paid back to any pledgor.<\/p>\n<p>&nbsp;<\/p>\n<p>Where bank accounts are involved, the Movables Security Law permits set-off by the relevant account bank, and the enforcement of any receivables security can result in those receivables being paid directly to the secured lender representative.<\/p>\n<p>&nbsp;<\/p>\n<p>For share pledges or mortgages, the security agent would apply to the courts for an execution judgment, whereupon the court can seize the relevant secured asset and provide for a court mandated sale process by the mortgagee directly, with or without sales conditions and with proceeds collected and distributed by the court.<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>Post-insolvency: <\/strong>Post-insolvency of a project company with secured obligations outstanding, the enforcement landscape changes owing to the operation of the Federal Decree Law No. (51) of 2023 Promulgating the Financial and Bankruptcy Law, which provides the necessary framework for insolvency proceedings for mainland companies. The nature of the impact of insolvency on the ability of secured finance parties to enforce over their security will depend, in part, on the nature of the insolvency proceeding commenced with respect to the project company. Typically, secured creditor enforcement is possible with consent of the courts <em>if<\/em> it does not undermine the broader restructuring plans of the project company.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>Preventative Settlement Plan: <\/strong>Initiated by the debtor, this plan allows for business continuation while seeking creditor approval for a settlement. A statutory moratorium (initially 3 months, extendable to 6 with court permission) restricts secured creditors from enforcing security without Bankruptcy Court approval. The sale of secured assets requires consent from the project company, its lenders, and the Bankruptcy Court, and will be denied if it hinders the debtor\u2019s activity or worsens the outcome for creditors. Priority over collateral proceeds is respected, subject to procedural requirements and preferential debts.<\/li>\n<li><strong>Restructuring scheme:<\/strong> This can be initiated by the debtor, any creditor or a supervisory body and the debtor will be required to submit a restructuring plan within 3 months with the creditors subsequently voting thereon and a court ratification to give it effect, followed by court supervision of implementation by a trustee.<\/li>\n<li><strong>Bankruptcy:<\/strong> Under UAE law, to the extent there is actual bankruptcy of the Company, a liquidator is appointed to gather and dispose of the Company\u2019s assets and settle its liability prior to wind up. Secured creditors can independently take enforcement action to execute against their secured assets or allow the liquidator to undertake the sale.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are other important considerations in relation to the security regime in the jurisdiction that secured parties should be aware of?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Long established procurement frameworks for the creation of projects exist in the Emirates of Abu Dhabi and Dubai and consent requirements stem from those extant frameworks:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>Consents are required from the Department of Energy in Abu Dhabi for creation of security over the property, rights and assets vested or to be vested in project companies situated within the Emirate of Abu Dhabi;<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>Costs for registration of security and in particular mortgages can be high and, in addition, notarization is required for certain security types, which requires financing parties to build in both timing and cost considerations (e.g. a share pledge agreement fee is 0.5% of the secured amount, capped at AED 15,000);<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>UAE law does not recognize floating charges, so movables security must be carefully structured to cover all intended assets, noting also that the Movable Securities Law does not cover all assets such as movable property where transactions are required to be registered in a special registry, public property or where owned by international governmental organizations. Security can be taken over current and future assets covered by that law;<\/li>\n<li>Land ownership is subject to foreign ownership regulation in the UAE, but exceptions do exist for independent power producers to hold land use rights;<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>Enforcing foreign law-governed agreements against a UAE entity may require specific procedures, including notarization, legalization, or document translation; and<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>Whilst it is true to say that there are UAE Central Bank Law requirements for financing institutions to have adequate security for borrower obligations, this is of limited relevance in a project financing context given the all-encompassing nature of the security taken for such transactions and as those restrictions are more likely to apply to individuals or sole proprietors.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What key project risks should lenders be aware of in project financings in your jurisdiction? This may include, but may not be limited to, the following risks: force majeure, political risk, currency convertibility risk, regulating or permitting risk, construction\/completion risk, supply or feed stock risk or legal and regulatory risk).<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The UAE has a long and successful history of project finance, particularly in the power and water sectors, with strong procurer track records and established financing structures. Consequently, a wide range of local and international lenders, including commercial banks, sovereign funds, multilaterals, and ECAs, are comfortable executing large-scale, English law-governed project financings in the jurisdiction.<\/p>\n<p>&nbsp;<\/p>\n<p>The UAE is an attractive investment destination due to its history of political stability, a strong track record of successful projects, and an improving legal and regulatory framework. The government\u2019s focus on economic diversification, particularly through its Net Zero 2050 strategy and expanding use of PPPs, is creating new opportunities.<\/p>\n<p>&nbsp;<\/p>\n<p>Transaction risks to consider:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>The UAE\u2019s legal system is a hybrid of civil law, Sharia principles, and, in certain free zones, common law, which can create uncertainties regarding the interpretation and enforcement of contracts, security interests, and dispute resolution mechanisms, meaning that legal advice should be taken at all stages of the structuring of any transaction.<\/li>\n<li>At the present time of writing, the local investment market has certainly been subject to additional geopolitical risk and some slowdown given conflict in the region, and there have been consequences on supply chains for goods imported into the UAE.<\/li>\n<li>Given the single procurer model prevalent across the Emirates, prospective borrowers and sponsors should bear in mind that lenders operating in the region may face client concentration considerations.<\/li>\n<li>Share and other security registration and perfection requirements vary by Emirate, and advice should be taken to ensure that process and timing requirements are taken into account in all project financing timelines.<\/li>\n<li>Where currency convertibility, strength and repatriation can often be an issue for consideration by lenders in the energy sector, this is less of a concern in the UAE, owing to the UAE Dirham currency being pegged to the US dollar. As noted above, certain assurances can be provided with respect to these aspects in direct agreements entered into with certain of the Emirati government entities.<\/li>\n<li>Other key risks to diligence are consistent with those that would typically be considered on transactions in the applicable sector in other jurisdictions including a combination of construction, technology, completion risk, feedstock, operating, force majeure, regulatory and permitting.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Lenders and investors should conduct thorough due diligence, engaging experienced local and international counsel to structure transactions that appropriately allocate and mitigate project financing risks.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are any governmental \/ regulatory consents required and are any financing or project documents requirement to be filed with any authority in order to be admissible in evidence in a court of law, valid or enforceable?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><ul>\n<li>As a starting point, any entity purporting to enter into any kind of financial arrangement with a borrower domiciled in the UAE is not required to be locally licensed (unless it is itself a UAE institution) but a UAE Central Bank licensed agent will need to be appointed to act for the applicable group of lenders on the financing. Separate requirements apply for the DIFC and ADGM.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>The requirement for governmental or regulatory consents in connection with project financings depends on the nature of the project, the sector involved, and the location of the project (Emirate onshore or within a free zone). For most large-scale infrastructure and natural resources projects, it is common for project companies to obtain a range of permits, licenses, and approvals from relevant federal and Emirate-level authorities prior to financial close. The more crucial of these will typically be the licence granted to permit the operation of the main activity of the project, be that power generation, water supply or otherwise.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>Additionally, projects will be required to obtain a range of environmental permits and land use approvals. In addition, certain sectors\u2014such as energy, water, and telecommunications\u2014are subject to oversight by dedicated regulatory bodies, which, in Dubai and Abu Dhabi, impose additional consent or notification requirements for project financings or changes in project ownership, in particular as relate to the assignment of rights in respect of the operating licences and to permit the ultimate enforcement of those rights, subject to certain conditions.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>With respect to the admissibility, validity, and enforceability of financing and project documents, UAE law does not require that such documents be filed with a governmental authority as a precondition to their enforceability in court. However, certain types of security interests\u2014such as mortgages over real property, pledges over shares, or assignments of receivables\u2014must be registered with the relevant public registries (such as the Land Department, the EIRC, or the commercial register) in order to perfect the security and ensure priority against third parties. Additionally, for documents executed outside the UAE that are to be used as evidence in UAE courts, notarization and legalization (including consular attestation and Ministry of Foreign Affairs authentication) may be required to ensure admissibility.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>Independent water and power producers are required by law to be licensed to carry out electricity generation, water desalination or both in co-generation facilities.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there are any specific foreign exchange, royalties, export restrictions, subsidies, foreign investment, that are relevant for project financings (particularly in the natural resources sectors)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the context of project financings in the UAE, particularly within the natural resources sectors, several regulatory considerations are relevant:<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Foreign exchange: <\/strong>The UAE does not impose foreign exchange controls, and the UAE dirham (\u201c<strong>AED<\/strong>\u201d) is freely convertible (and pegged to the USD), which facilitates the repatriation of profits and the servicing of foreign debt.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Royalties for extraction projects: <\/strong>Projects involving the extraction of natural resources such as oil, gas, and minerals in the UAE are typically subject to concession agreements with the relevant Emirate-level authorities, which may stipulate royalty payments, profit-sharing arrangements, or other fiscal terms. Ras Al Khaimah adopts production sharing arrangements to offer petroleum production sharing opportunities for overseas investors. More generally, the royalty rates will be set on an individual contract basis, which will be opaque as to fiscal arrangements but will usually incorporate a combination of royalty and income tax rates.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Export restrictions: <\/strong>As a global trade hub with a strong transshipment and re-export business, the UAE\u2019s trade is regulated by international treaties, federal laws, and local customs bodies. Whilst there are restrictions on the flow of certain controlled goods, primarily to protect public health, safety, and national security, these do not normally affect project financings.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Subsidies: <\/strong>Please see section 3 on government support for projects set out above noting that the approach to subsidies and project support varies from Emirate to Emirate. Subsidies are not, however, commonly available for private sector projects in the natural resources sector, although they can help to attract foreign direct investment. This is further incentivised in the free zones through lower energy prices or reduced fees where projects can be aligned with national strategic objectives, such as renewable energy.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Foreign investment in the UAE:\u00a0 <\/strong>See prior comments on this topic with regards to foreign ownership restrictions across sectors, regulation of lending entities, and know your customer obligations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please set out any specific environmental, social and governance issues that are relevant. For example, are project companies subject to certain ESG laws, reporting requirements or regulations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Environmental, social, and governance (\u201c<strong>ESG<\/strong>\u201d) considerations have become increasingly significant over the best part of the last two decades in the context of project financing.\u00a0 The nature of the sector and processes, and the policies and practices of the many financing institutions who lend into these energy and infrastructure projects, typically dictate in any case the nature of the upfront diligence review and impact assessment (\u201c<strong>EIA<\/strong>\u201d) to be undertaken. Since 1999, projects were, as matter of Federal Law, required to undertake EIAs, with environmental management plans to be implemented and ultimately environmental licenses, for construction, to be granted as a condition precedent to achieving financial close. This EIA will be coupled with ongoing monitoring requirements, setting out the standards to which the project must perform and the laws and regulations with which they must comply, and also how actions are to be reported and taken in the event of an adverse ESG circumstance arising at the relevant project site.<\/p>\n<p>&nbsp;<\/p>\n<p>The UAE has set ambitious targets for its intended transition from an oil focussed jurisdiction to a diversified approach to its economy through the UAE Net-Zero 2050 strategy and the Water Security Strategy 2026.\u00a0 Along with ADGM and DIFC, the UAE has introduced various ESG-related laws reflecting international best practices and national priorities. Reporting requirements vary by sector, size, and location, but new legislation, such as Federal Decree Law No. (11) of 2024, mandates that certain businesses track and reduce emissions.<\/p>\n<p>&nbsp;<\/p>\n<p>Social considerations are addressed through labour laws and Emiratisation policies. On the governance front, whilst the new CMA provides a framework for public companies, there is a growing expectation for private companies to adopt robust governance. Initiatives like the UAE Sustainable Finance Framework and the Green Bond and Sukuk Programme promote sustainable finance products using European integrated business planning taxonomies, requiring the integration of ESG into corporate governance.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has any public-private partnership models or laws been enacted in the jurisdiction, and if so, are they specific to certain industry sectors?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The UAE has formalized public-private partnership (\u201c<strong>PPP<\/strong>\u201d) models to attract private investment for key infrastructure projects. By leveraging private sector expertise for design, development, and service provision, PPPs encourage foreign direct investment and support energy security and economic growth.<\/p>\n<p>&nbsp;<\/p>\n<p>At the federal level, Federal Law No. 12 of 2023 on Public-Private Partnerships (\u201c<strong>PPP Law<\/strong>\u201d) and the accompanying Federal Manual on PPP Projects (\u201c<strong>Federal PPP Framework<\/strong>\u201d) provide a comprehensive legal framework for PPP projects. This framework facilitates collaboration between government and private sectors in areas like energy, transport, and healthcare. It applies to federal entity-procured projects, excluding certain contracts (e.g. outsourcing, national security, projects under AED 150 million). The framework supports typical project finance structures by contemplating a project company and recognizing lender step-in rights, making it suitable for large-scale infrastructure.<\/p>\n<p>&nbsp;<\/p>\n<p>In addition to the federal framework, certain Emirates have enacted their own PPP regulations, with Dubai being a notable example through Law No. 22 of 2015 regulating partnership between the public and private sectors in the Emirate of Dubai. In Abu Dhabi, it is Abu Dhabi Law No. 2 of 2019 that fosters collaboration between the public and private sectors, noting that in both cases, a separate body of legislation governs the development of IPPs between the applicable public bodies and private investors through a bid process.\u00a0 These local laws often provide additional detail and sector-specific provisions, reflecting the strategic priorities of the respective Emirate. While the PPP frameworks are broad and not limited to specific industries, in practice, sectors such as infrastructure, utilities, and renewable energy have seen the most activity under these models. The evolving legal landscape demonstrates the UAE\u2019s commitment to leveraging PPPs to drive economic diversification and sustainable development.<\/p>\n<p>&nbsp;<\/p>\n<p>Separate to the federal and Emirate PPP laws Abu Dhabi and Dubai have separate laws for the procurement of power or water generation projects. These laws set out the framework for procurement, licensing and general regulation of this area. Abu Dhabi\u2019s independent power producer (\u201c<strong>IPP<\/strong>\u201d) framework has become the standard for bankable IPP projects across the region. \u00a0Dubai has Law Number 6 of 2011 Regulating the Participation of the Private Sector in Electricity and Water Production in the Emirate of Dubai, which applies to all power and water generators connected to the transmission system in Dubai.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Will foreign judgments, arbitration awards and contractual agreements to arbitrate be upheld?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Foreign judgments and arbitration awards are recognised and enforceable in the UAE, subject to certain conditions. As a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), the UAE enforces foreign arbitral awards, provided they do not contravene public policy or Sharia law. Federal Law No. 6 of 2018 on Arbitration and subsequent consolidations further modernizes the framework, supporting the enforceability of arbitral agreements and awards.<\/p>\n<p>&nbsp;<\/p>\n<p>Enforcement of foreign court judgments is not automatic and is governed by the UAE Civil Procedure Code and any applicable treaties. Without a treaty, courts consider reciprocity and whether the judgment meets criteria like finality and compliance with public order. Enforcement of judgments can be more challenging than for arbitral awards given the lack of need for reciprocity or treaty to recognise their enforcement, making arbitration often preferred for cross-border transactions. This is a developing area of law with the enforcement of UAE judgments in the UK being established through the landmark Supreme Court case of Lenkor Energy Trading v Irfan Iqbal Puri (2020) EWHC 75 (QB), provided there is no conflict with public policy.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is submission to a foreign jurisdiction and waiver of immunity effective and enforceable?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the UAE, the effectiveness and enforceability of submission to a foreign jurisdiction and waiver of immunity are subject to both statutory provisions and judicial practice, with any enforcement of a foreign judgment requiring strict compliance with procedural and substantive requirements (including that the applicable judgment was final and conclusive, meaning that injunctions and similar types of relief will not typically be capable of enforcement by the courts of the UAE). UAE law recognises the principle of party autonomy, allowing parties to agree to submit disputes to a foreign court or arbitral tribunal. This has, over the years, been a critical part of why parties have been comfortable executing large-scale, multi-billion-dollar transactions governed by English law within the boundaries of the UAE. However, UAE courts retain discretion to review such agreements, particularly where public policy considerations or the morality of the UAE are implicated and where an Emirati government is seeking to enter into a contract, special consent is required to enable that contract to be governed by a law other than that of the UAE, meaning that the PPAs and PWPAs entered into by investor backed SPVs are local law governed.<\/p>\n<p>&nbsp;<\/p>\n<p>In practice, UAE courts may decline to enforce a submission to foreign jurisdiction clause on one of these grounds or if the dispute falls within the exclusive jurisdiction of UAE courts, or where they are unable to establish reciprocity. \u00a0The advent of the 2022 Civil Procedure Code has brought a greater degree of predictability to question of enforceability, at least as far as the UAE laws are concerned, recognising that different regimes will apply in the ADGM and DIFC.<\/p>\n<p>&nbsp;<\/p>\n<p>Waivers of sovereign immunity are enforceable but require careful consideration. There is a strong presumption that a state-owned entity created for a commercial purpose is not immune from legal action with cited evidence in some Emirate cases considering separate terms of legal personality, accountability of entity resting with the entity and not the Emirate, evidence of separation between the parties, and the commercial nature of issues under dispute. As for the enhancement of foreign judgments in the UAE, certain procedures apply to the ability to challenge and dates sovereign immunity claims. However, any waiver of immunity by a UAE government entity must be explicit and unequivocal, and Federal Law prescribes that public assets have strict immunity from enforcement. This will be a critical consideration of project financing stakeholders who are concerned to ensure their long-negotiated contracts are capable of enforcement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please identify what you consider to be (a) the key current issues for project financing in your jurisdiction; and (b) any emerging trends or topics which should be considered or focused on by project financing stakeholders in this jurisdiction.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>a)\u00a0 The key current issues for project financing in the UAE are broadly positive, with a long track-record of successful projects. Investors should be aware of the evolving legal and regulatory landscape concerning foreign investment, local content, security, and AML checks. Current legal advice is essential for compliance and structuring. The limited history of security enforcement in the region remains a point to note.<\/p>\n<p>&nbsp;<\/p>\n<p>b)\u00a0 Key emerging trends in the UAE project finance landscape include:<\/p>\n<p>&nbsp;<\/p>\n<p>(i)\u00a0 Decarbonisation and energy security: The UAE is expanding renewable energy capacity through solar, wind, and waste-to-energy projects, alongside growth in battery storage. This has been further supported by additional energy sector laws from 2018 and 2019 driving a procurement process that will facilitate the UAE reaching the 50% renewable targets over the next 25-year period.<\/p>\n<p>(ii)\u00a0 Nuclear: The Barakah nuclear plant already supplies over 25% of Abu Dhabi\u2019s electricity and is expected to commence a capacity expansion project in the short to medium term. This fits well with the Abu Dhabi intention to double its nuclear capacity alongside the renewable project proliferation across the UAE more broadly;<\/p>\n<p>(iii)\u00a0 Local partnerships: Local partners are accelerating projects, such as the world\u2019s largest solar park with integrated battery storage and the implementation of further PPPs in social infrastructure such as schools. ADNOC, while expanding crude capacity, is also focused on low-carbon fuels and CCUS, with significant hydrogen and SAF projects underway;<\/p>\n<p>(iv)\u00a0 Growth in oil and gas: The energy transition drive is coupled with significant growth in oil and gas, driven by upstream discoveries, digitalisation, major investments to increase production capacity (e.g. ADNOC\u2019s USD 150 billion investment plan through 2027 to raise production capacity to 5 million barrels per day), and facility upgrades, with foreign investment including the strategic partnership between ExxonMobil and ADNOC to expand production capacity at the offshore Upper Zakum field;<\/p>\n<p>(v)\u00a0 Private capital: Private capital and private equity are increasingly investing in energy and infrastructure assets, particularly brownfield or de-risked projects, complementing traditional commercial bank financing. We would mote the recently announced USD 30 billion infrastructure platform between Global Infrastructure Partners, ADNOC and Temasek.<\/p>\n<p>(vi)\u00a0 Emirate-level investment: Ambitious goals (e.g. Dubai Plan 2021) require significant capital for infrastructure to support population growth and development as financial and trade hubs, and to attract foreign investment.<\/p>\n<p>(vii)\u00a0 PPP activity: A resurgence in PPP activity (see section 12).<\/p>\n<p>(viii) Digital infrastructure: Government initiatives and capital commitments are fuelling growth in this sector. For example, a 1-gigawatt AI infrastructure cluster is under development, positioning the UAE at the forefront of this trend.<\/p>\n<p>(x)\u00a0 The UAE is operating a business-as-usual policy notwithstanding the most recent Strait of Hormuz developments, and the wider conflict in the region.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please identify in your jurisdiction what key legislation, subsidy regimes or regulations have been implemented (or will \/ plan to be) for projects in connection with the energy transition and\/or specific projects due to energy security?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The UAE is positioning itself as a key player in the energy transition, with a rapidly evolving legislative framework designed to facilitate local growth within an attractive and transparent structure while providing returns for investors.<\/p>\n<p>&nbsp;<\/p>\n<p>The UAE\u2019s legislative framework for the energy transition is driven by the UAE Energy Strategy 2050, which aims to increase clean energy\u2019s share to 50% by 2050. Key legislation includes Federal Law No. 12 of 2018 on the Regulation of the Energy Sector. Emirate-level strategies (Dubai\u2019s Clean Energy Strategy 2050 and Abu Dhabi\u2019s Vision 2030) and regulatory bodies like Abu Dhabi Department of Energy and DEWA have introduced incentives for private sector participation in renewables. The UAE is also developing its framework to support emerging technologies like hydrogen and carbon capture, in line with its international climate commitments.\u00a0 Additionally, the UAE has implemented net metering regulations and established green building codes to encourage energy efficiency and the integration of distributed renewable energy resources.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please identify if there are any material tax considerations which need to be taken into account for a project financing in your jurisdiction, and if so, how such tax issues can be mitigated.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Tax considerations are generally favourable for project financing transactions in the region due to the UAE\u2019s historically low-tax environment, but in the last decade the UAE government has sought to diversify its income streams through the introduction of certain taxes. There are, therefore, several tax considerations for stakeholders in project financings taking place in the UAE:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>Value Added Tax (\u201c<strong>VAT<\/strong>\u201d) applies at a rate of 5% to most goods and services, including those related to project development and operation, which can impact the overall cost structure of a project and should be considered for purposes of the project budget and financial model;<\/li>\n<li>Federal corporate tax regime applies a standard rate of 9% on business profits exceeding AED375,000;<\/li>\n<li>An extensive number of double tax treaties exist with the UAE, with such legislation and regulation being the platform for the Emirates being seen as a leading financial centre;<\/li>\n<li>A withholding tax regime does apply to interest and dividends but at a zero rate, which has further facilitated investment; and<\/li>\n<li>Careful structuring is required to ensure compliance with transfer pricing rules.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Of course, as for other areas of this article, the DIFC and ADGM offer certain further tax advantages to corporates seeking to locate there and invest into the UAE more broadly.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What types of funding structures (e.g. debt, equity or alternative financing) are typical for project financing in your jurisdiction. For example, are project bond issuances, Islamic finance and \u2013 in the context of mining deals \u2013 streams or royalties, seen as attractive (and common) options for stakeholders? Are you seeing private credit in project financing in your jurisdiction or other alternative financiers? If so, what types of projects are they looking to finance and what are the key structuring issues of such financings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Project financing in the UAE uses diverse funding structures tailored to the project\u2019s specific needs. The choice of financing depends on the project\u2019s risk profile, sponsor strength, and banking relationships, with access to capital influenced by lender concentration limits for specific sponsors, sectors, and jurisdictions.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Project financing (multi-sourced)<\/strong>:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>Many of the large-scale projects in recent years have been government authority procured projects, meaning that conventional debt financing provided by a combination of local and international banks, export credit agencies and Islamic finance institutions has remained a cornerstone of project finance, particularly for large-scale infrastructure, energy, and real estate developments.<\/li>\n<li>By virtue of that structure, the lenders will have certain minimum equity funding pre-requisites to be met that manifest as debt-to-equity ratios in the finance documents (alongside other applicable cash flow ratios). The question will be whether such equity funding will be advanced upfront with true-up capability at specified junctures or whether the funding requirements of the project will be met pro rata between debt and equity.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>Equity financing:<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li>Sole equity financing of an energy and infrastructure project is possible but more likely for the early phases of a project whilst sponsors are planning to structure the longer term, permanent capital solution and\/or seeking to derisk the project from a lender\/investor perspective. The capital needs of greenfield projects are typically too great to be capable of funding through single investors.<\/li>\n<li>Sponsors and strategic investors can enter into joint ventures for projects, contributing both financing and capital in exchange for ownership interests and large ownership stakes can be sold down to raise further capital for the initial sponsors.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>Islamic financing:<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li>As expected for Islamic jurisdictions, the UAE is a global hub for Islamic finance, and Sharia-compliant structures, e.g. ijara (leasing), murabaha (cost-plus financing), and sukuk (Islamic bonds).<\/li>\n<li>These are used both on a stand-alone basis and separately as part of a wider, multi-sourced financing structure.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>Project bond financing:<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li>Project bond issuances, including both conventional and sukuk bonds, have gained traction as alternative sources of long-term capital, particularly for infrastructure and utility projects.<\/li>\n<li>We would typically expect project bond financings to be more attractive in the context of a project that is operational, where the financiers are not going to be required to assume day one construction risk, as a refinancing option to prior existing greenfield project financing.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>Other:<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li>For certain sectors such as mining and natural resources, alternative financing mechanisms such as streaming agreements and royalty arrangements are employed, though are less prevalent in the UAE than they are in some other jurisdictions.<\/li>\n<li>In recent years, the Government has itself, however used, royalty financings as a means of generating revenues from certain of the major telecoms players in the market such as E&amp; and du, with AED 3.54 billion being paid by way of federal royalty to the UAE government.<\/li>\n<li>In December 2025, ADNOC secured US$11 billion of financing in pre-export financing to monetise future gas production from the Hail and Ghasha development, part of the larger Ghasha Concession, which is offshore Abu Dhabi. This was reported as a non-recourse financing, effected by ADNOC alongside its partners Eni S.p.A. and PTT Exploration and Production Public Company Limited.<\/li>\n<li>The choice of funding structure is often influenced by the regulatory environment, the risk profile of the project, and the availability of incentives or support from government-related entities. Overall, the UAE\u2019s sophisticated financial sector and openness to innovative financing solutions make it an attractive jurisdiction for a wide array of project finance structures.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please explain if there are any regional development banks or export credit agencies, and if so, what is their role in project financing in your jurisdiction and beyond.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>UAE projects benefit from a multi-sourced financing approach involving local and international commercial banks, Islamic finance institutions, and export credit agencies (ECAs) to meet large capital requirements. \u00a0Regional development banks (e.g. APICORP, IsDB) and international ECAs (e.g., JBIC, KEXIM) are active, often reflecting (i) strong sponsors on transactions, (ii) strong, established G2G and sponsor\/lender banking relationships, and (iii) the provenance of the construction package (contractor and\/or construction goods) and\/or source of equity funding for the relevant project.\u00a0 \u00a0The UAE\u2019s own ECA, Etihad Credit Insurance (ECI), together with the local development banks of Emirates Development Bank and Abu Dhabi Fund for Development also play a role in project financings but they typically are not taking the lead in structuring of the transactions, rather their involvement can be key to mobilizing private capital and reducing project risk.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please explain if there are any important insurance law principles or considerations in connection with any project financing in your jurisdiction.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Project financings require comprehensive insurance for construction and operational phases, with lenders typically named loss payees and additional insureds. In the UAE, only locally licensed insurers can issue policies for risks within the country, save to the extent that the local market does not provide the relevant insurance product, and these activities are regulated by the Central Bank of the UAE. Reinsurances will be placed offshore although they can also be taken by UAE insurers. It is important to note that certain policy exclusions may be unenforceable if deemed contrary to public policy. Therefore, a careful legal review is essential to ensure compliance and adequate protection for all parties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">8787<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/148796","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=148796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}