Khazna Solar project reaches financial close, marking a major step in UAE's renewable energy expansion

Masdar and ENGIE announced that they’ve reached financial close for the 1.5 gigawatt (GW) Khazna Solar Photovoltaic (PV) independent power project. This is a pretty big step forward for one of Abu Dhabi’s largest planned utility-scale renewable energy assets.

The project company, which is jointly owned by Abu Dhabi Future Energy Company (Masdar) and ENGIE on a 60:40 split, managed to secure funding from seven lenders, both regional and international. Among the participants are Abu Dhabi Islamic Bank, Crédit Agricole Corporate and Investment Bank, KfW IPEX, BNP Paribas, The Hongkong and Shanghai Banking Corporation, Sumitomo Mitsui Trust Bank, and Emirates Development Bank. According to statements from Masdar and ENGIE, reaching this financial close paves the way for construction and supports the long-term plan, which has been agreed upon with Emirates Water and Electricity Company (EWEC).

Khazna was awarded to Masdar and ENGIE back in October 2025, and the plant will operate under a 30-year power purchase agreement with EWEC. The developers point out that the solar farm, which is located somewhere between Abu Dhabi and Al Ain, is scheduled to start commercial operations in 2028. When fully operational, it’s expected to generate enough electricity to power roughly 160,000 homes and help prevent about 2.4 million tonnes of CO₂ emissions annually. Both companies see these figures as an essential part of the UAE’s broader vision to cut carbon emissions.

Mohamed Jameel Al Ramahi, CEO of Masdar, called the financial close a “significant milestone” , not just for this project but also for Masdar’s expanding clean-energy portfolio. Catherine MacGregor, ENGIE’s CEO, said that closing this deal is a key step in rolling out large-scale sustainable infrastructure, which supports the UAE’s goal of reaching climate neutrality by 2050. Meanwhile, EWEC’s CEO, Ahmed Ali Al Shamsi, described the project as a major strategic achievement for the utility, emphasizing that it would be vital for meeting Abu Dhabi’s goal of providing 60% of energy demand from clean, renewable sources by 2035.

Industry voices also highlight the project’s regional importance. As per EWEC and the developers, Khazna is expected to be among the largest utility-scale solar plants in operation worldwide. It’s seen as a crucial asset in Abu Dhabi’s efforts to boost renewable energy capacity. The project aligns well with the emirate’s plans to significantly increase clean energy’s share in its power mix over the next decade.

The financing approach and the 30-year PPA model follow recent international trends for large renewable energy projects. It involves a mix of commercial and export-credit lenders alongside development-focused banks. The lender pool includes both local institutions and global banks experienced in project finance for infrastructure. These kinds of setups usually distribute construction and operational risks among sponsors, lenders, and offtakers, with the long-term revenue support coming from the PPA, which is designed to match the duration of the project’s income streams.

Khazna’s timeline fits into a broader push across the UAE to accelerate clean-energy initiatives. Recent government strategies and project awards have emphasized expanding solar and other low-carbon technologies. The goal is to lower emissions while keeping the grid stable and reliable. EWEC has framed Khazna as part of a bigger program aimed at utility-scale renewables , a key component in meeting national decarbonisation and energy security targets.

Both Masdar and ENGIE say the project will be built to international standards for performance, safety, and environmental management. Masdar sees Khazna as a strategic addition to its global renewable energy portfolio, while ENGIE highlights the transaction as evidence of its commitment to delivering large-scale, low-carbon infrastructure. Both companies also pointed out that existing relationships with Emirati stakeholders and regional experience played a role in ensuring smooth project delivery.

Of course, delivering such a large-scale project will definitely test supply chains, grid integration planning, and construction schedules that span multiple years. Managing the connection of intermittent power sources , especially from a single, large site , will require careful coordination by grid operators and planners to keep the system reliable. The 30-year PPA is meant to provide stable revenue for the project and minimize financial risks for the lenders involved.

The partners emphasize that they’ll be working closely with EWEC throughout the project’s development and operational phases. Masdar describes it as “a valuable addition” to the UAE’s clean energy resources, which will contribute to socio-economic growth by providing dependable, low-carbon electricity. ENGIE, on the other hand, frames reaching financial close as a crucial step toward fulfilling their contractual commitments to build and run the facility.

With commercial operations expected in 2028, Khazna comes at a time when the UAE is ramping up efforts to cut emissions and expand its renewable energy capacity. The project underscores the importance of large-scale solar within the country’s overall decarbonisation strategies, and it also highlights how blended finance models and long-term off-take agreements are essential for attracting investment in energy transition infrastructure.

Source: Noah Wire Services