Abu Dhabi’s Al Dhafra solar project pioneers $870 million green bond milestone with climate certification

Abu Dhabi’s Al Dhafra solar project has hit a notable milestone in the world of green finance. Recently, a group led by the Abu Dhabi National Energy Company (TAQA) and Emirates Water and Electricity Company (EWEC) issued a hefty US$870.75 million in long-term green bonds, aimed at refinancing existing project debt. These bonds, which carry a coupon rate of 5.794% and are set to mature in June 2053, were structured by BNP Paribas and HSBC. Importantly, they achieved Climate Bonds Certification, which really underscores their compliance with global standards for sustainable finance.

As reported by The National, this issuance is basically refinancing the Al Dhafra Solar Photovoltaic (PV) Independent Power Plant , a massive 2 gigawatt facility that was commissioned in 2023. It’s actually one of the biggest single-site solar parks in the world. Industry data show that this project produces around 4,700 GWh of electricity annually, which is enough to power approximately 200,000 homes, plus it helps offset roughly 2.4 million tonnes of CO2 every year. The plant sells its power through a 30-year power purchase agreement with EWEC, which secures its revenue stream over the long haul.

Farid Al Awlaqi, CEO of TAQA’s Generation division, said: “After more than two years of full commercial operations, we’re really pleased that the bonds issued by the Al Dhafra Solar PV Power Plant have been certified as a fully green asset.” He added that this certification is a good testament , well, at least to me , to the plant’s solid operational track record and optimistic projections for the future. The company believes that this refinancing will not only boost the project’s long-term financial sustainability but also free up capital for other renewable ventures down the line.

The ratings agencies seem to agree that the bonds are pretty solid. Moody’s is expected to give an A3 rating, while S&P might rate them an A , figures all pointing to a stable cash flow, long-term power agreements, and strong support from the consortium partners. Market watchers note that the coupon level is quite competitive considering similar long-term sovereign and project-backed green debts from the region.

Ownership of the project is divided among TAQA (40%), Masdar (20%), EDF Power Solutions (20%), and Jinko Power (20%). Charles Bai, President of Jinko Power’s International Business, highlighted that the success of the bond “underlines both how resilient the project is operationally and investor confidence in Abu Dhabi’s large-scale renewable energy projects,” according to their statement. Meanwhile, EWEC’s CEO, Ahmed Ali Alshamsi, mentioned that this is the second solar-focused bond issued by the authority since the Noor Abu Dhabi project in 2022. He pointed out that tapping into fixed-income markets helps strengthen financial resilience and allows for redeployment of capital into new solar PV projects.

Beyond the financing aspect, the project features some pretty innovative tech and environmental measures that really boost its green credentials. For instance, it uses close to four million bi-facial solar panels and employs autonomous cleaning robots powered by the plant itself. The project reports claim that these robots cut down on freshwater usage significantly compared to traditional cleaning methods , an especially critical benefit in arid regions where water scarcity is a real issue for large solar farms.

Getting Climate Bonds Initiative’s certification adds another layer of external validation to this. The organization’s press release calls the Al Dhafra refinancing a shining example of sustainable energy finance at a global level. Certification generally requires the project to meet strict low-carbon standards and commit to ongoing reporting. So, it’s a notable achievement.

That said, the whole green bond market still faces some broader challenges. As governments and developers work to reuse capital, TAQA has set ambitious targets , aiming for two-thirds of its electricity capacity to come from renewables by 2030, building on an estimated fleet of 70 GW. Industry experts say that green bonds could play a crucial role in making that happen, but they also warn that careful oversight and transparent reporting are essential to ensure that the funds genuinely lead to the expected emissions reductions and community benefits.

At the project level, metrics like annual energy output and CO2 savings, as reported by Power-Technology and other sources, help reinforce investor confidence. The refinancing arrangement involved international banks and drew interest from fixed-income investors looking for long-dated green assets backed by sovereign support.

Of course, not all commentary is just corporate chatter. Analysts observing the Gulf’s push into renewables note that such large refinancing deals serve dual purposes: cutting the cost of capital over the system’s life and creating capacity for additional investments. But they also emphasize the ongoing need for transparent, standardized reporting so that green bonds truly deliver on their climate promises.

All in all, the Al Dhafra refinancing isn’t just a big financial deal , it’s also a statement of confidence in Abu Dhabi’s renewable infrastructure and might even set a precedent for future large-scale green debt offerings across the Middle East and beyond. If the project continues to perform as expected, with good ratings and environmental impact, this bond could well become a model for similar efforts elsewhere.

Source: Noah Wire Services