As per ADREC, sales and purchases totalled AED50.97 billion through 8,940 transactions, reflecting a 228.6% increase in value and a 134% rise in volume compared to Q1 2025. Mortgage transactions also reached AED 15.03 billion through 4,578 transactions, representing a 53.4% increase in value and a 48.8% rise in volume year-on-year.

Hudayriyat Island was the leading area for real estate transactions, recording deals amounting to approximately AED 11.97 billion. It was followed by Reem Island, with AED 9.45 billion, and Saadiyat Island, with AED 8.8 billion, while Yas Island recorded activity exceeding AED 5.5 billion in transactions.

“This quarter’s performance is a clear reflection of the confidence Abu Dhabi continues to earn from investors both locally and internationally. Reaching a record level of activity is not only a sign of demand, but it also signals a market that is becoming more disciplined, with a clear focus on long-term investment,” said Rashed Al Omaira, Director General of ADREC.

“Our role as ADREC is to ensure this growth is supported through consistent oversight and a regulatory framework that upholds trust and accountability across the sector. This is what gives Abu Dhabi its strength. It is not about short-term momentum, but a market built on strong fundamentals, positioning it as a reliable investment destination,” the official added.

Despite regional volatilities, market indicators continue to show sustained demand across the UAE capital’s real estate sector, with leasing activity maintaining strong growth into March.

“The repeat lease price index recorded a 16% annual increase compared to March 2025, underscoring continued demand from end users and investors,” ADREC noted.

To address the strong demand outpacing supply, the market has been supported by a growing pipeline. Some 16 new real estate projects got registered during Q1 2026, a 60% increase compared to the same period in 2025.

“Residential supply in the Abu Dhabi region is projected to increase by 10,272 units in 2026, rising from 314,976 to 325,248, representing annual growth of 3.3%. Supply is projected to grow further in 2027, reaching 333,564 units. This reflects a market that continues to expand on solid foundations,” ADREC said.

Another salient point of ADREC’s report was the exceptional growth seen in the Foreign Direct Investment (FDI) domain, as total investments reached AED 8.27 billion, marking a 423% increase compared to the Q1 2025 and equivalent to the total figure recorded during 2025. Investors from 99 nationalities contributed to this performance, up from 68 nationalities last year.

“Foreign investment activity remained strong within investment zones, accounting for approximately 84% of total investment value, surpassing AED 36.4 billion out of a total AED 43.59 billion. This represents a 242% increase compared to the same period last year, with key contributing markets including the United Kingdom, India, the Russian Federation, China, Jordan, France, and Egypt,” ADREC concluded.

The post Abu Dhabi records USD 18 billion in Q1 property transactions appeared first on International Finance.

According to the department, the policy will now cover villa owners and residential buildings, enabling the latter to generate and store electricity from rooftop solar systems and efficiently integrate their usage with the grid.

The latest initiative is part of DoE’s mandate to develop policies and regulatory frameworks that advance the Emirati city’s transition towards a more efficient and sustainable energy system, while promoting the adoption of smart and flexible solutions for energy production and consumption.

“This builds on the success of the policy’s first phase, launched during the World Government Summit in February, which enabled owners of farms, rest houses, and ranches to benefit from solar energy solutions for self-generation and storage of electricity, improving consumption efficiency. The expansion reflects the growing uptake of renewable energy solutions among customers and aligns with national objectives to meet the increasing demand for energy through advanced solutions serving all sectors,” reported Emirates News Agency.

“The new phase focuses on facilitating adoption through a simplified regulatory framework that streamlines installation and grid connection procedures, alongside the standardisation of technical requirements to ensure high levels of safety and operational efficiency. In line with the first phase of the policy, DoE issued a policy on the procurement of efficient consumption appliances, providing a practical framework to support individuals and entities in purchasing and operating the most efficient solutions based on actual performance data and total lifecycle cost, enabling more efficient and sustainable long-term decision-making,” it stated.

“The policy covers key systems that will impact consumption efficiency, including air conditioning and cooling, water heating, lighting, and electrical appliances, as well as pumps, motors, and irrigation systems. It also highlights best operational practices, smart control solutions, and regular maintenance, contributing to reduced energy and water consumption, lower peak loads, and enhanced economic and environmental efficiency,” DoE remarked.

Under the second phase, customers will be enabled to meet a significant share of their daily energy consumption during daytime, allowing them to store electricity through battery storage systems, substantially reducing pressure on the grid and improving electricity load management across Abu Dhabi and the UAE.

“The second phase of the Solar Energy Self-Supply Policy represents a significant step in advancing the policy’s implementation, integrating the residential sector to enhance energy consumption efficiency and support the integration of the power system,” said Abdulaziz Mohammed Al Obaidli, Director-General of Regulatory Affairs at the DoE.

“We are strengthening partnerships in the transition towards clean energy, contributing to a more balanced and sustainable energy mix by empowering a broader segment of society,” he concluded.

The post Abu Dhabi launches phase two of solar policy, residential sector to get coverage appeared first on International Finance.

The company also noted that despite the ongoing Middle East conflict, ADNOC L&S’ global operations have remained normal, as the business remains financially strong and fully operational across all divisions.

“ADNOC L&S continues to closely monitor the current operating environment and is working in coordination with relevant authorities and stakeholders to ensure the safety of its people and the continuity of its operations,” the company remarked in a media note.

Breaking down the key financial details, dividends for the first nine months of 2025 totalled USD 243.75 million (AED 859.3 million), with the third-quarter dividend already paid in December 2025. Subject to required approvals, the dividend will increase by 5% annually from 2026 to 2030, before being paid out quarterly.

“ADNOC L&S delivered record 2025 results, with EBITDA up 32% and net profit up 14% year-on-year, reflecting the ongoing transformation of the business into a global market leader, underpinned by a diversified, resilient business model and disciplined capital deployment. As of December 31, 2025, the Company’s share price has increased by 195% since the IPO, strengthening investor trust in ADNOC L&S’ long-term strategy. Performance was driven by favourable market demand, strong operational execution, and continued expansion across core and growth segments. The integration of Navig8, an international shipping pool operator and commercial management company, was a milestone that strengthened and transformed the company’s capabilities across its logistics value chain,” the venture commented.

Dr. Sultan Al Jaber, Chairman of ADNOC L&S, said, “For shareholders, performance translated into tangible returns. Financial discipline remains central to our strategy, and this strength enables us to pursue value‑accretive growth while maintaining attractive and predictable shareholder returns. ADNOC Logistics & Services has built a global platform underpinned by a resilient business model anchored by long‑term contracts. Looking ahead, our diversified logistics capabilities and disciplined capital framework position the Company to deliver through cycles while supporting ADNOC’s expanding global ambitions.”

“ADNOC L&S continued to deliver its growth strategy built around service excellence and a safe and smart operational execution. Driven by organic growth and our acquisition of an 80% stake in Navig8, our robust balance sheet, prudent leverage policy and strong operating cash flows anchor our resilience. Our Value Efficiency Initiative, introduced in early 2025, delivered $119 million (AED 437 million) over the year, surpassing its original target by 19%. Our ongoing technology and AI-driven innovation, beyond increasing process efficiency across the business, is also delivering tangible service enhancements, creating additional value for ADNOC L&S and our customers,” said Captain Abdulkareem Al Masabi, CEO of ADNOC L&S.

Talking about the January 2025 acquisition of Navig8, an international shipping pool operator and commercial management company, which cost ADNOC L&S USD 999 million (AED 3.7 billion), the move resulted in the immediate integration of Navig8’s 32-vessel fleet, along with the adoption of the company’s advanced commercial and digital capabilities within ADNOC’s fold, significantly expanding its global footprint to 19 cities. The acquisition added commercial scale, strengthened ADNOC L&S’ revenue profile, and improved access to global energy and commodities flows.

“Navig8 provides the Company with a broader international platform for its next phase of growth. In 2025, ADNOC L&S also strengthened its fleet with the first two of a total order of nine Very Large Ethane Carriers (VLECs) and an additional four LNG carriers to generate long-term contracted revenue. On March 23, 2025, the company took delivery of the fifth of six new-build liquefied natural gas carriers from the Jiangnan Shipyard in China,” the venture remarked.

ADNOC L&S also secured long-term strategic partnerships, including a 50-year agreement with TA’ZIZ to develop the UAE’s first dedicated chemicals export port, projected to generate revenue flow of over USD 1.3 billion (AED 4.8 billion) in its first 27 years. A 15-year strategic agreement with Borouge further strengthens ADNOC L&S’ contracted revenue base in the domain of petrochemicals exports, with an estimated value of USD 531 million (AED 1.95 billion).

“With the continuous digitalisation of an increasing number of core business processes, ADNOC L&S has been leveraging AI, big data, and advanced digital platforms to drive service excellence, operational performance, and safety. Its AI-enabled Smart Port Solution reduced vessel turnaround time by up to 90% and cut service sourcing from three hours to 45 seconds, while enhancements to the Integrated Logistics Management System and Integrated Logistics Services Platform increased cargo capacity by up to 40% and improved vessel utilisation,” the business concluded.

The post ADNOC L&S shareholders approve dividend payout appeared first on International Finance.

“The initial phase of the study project, to be carried out in collaboration with relevant entities, will focus on revitalising the district’s waterfront, with plans to deliver expansive green spaces that enhance public facilities and preserve the area’s unique identity,” stated the DMT.

Through this Mussafah redevelopment project, DMT aims to address future needs, enhance essential services, attract additional investment, and deliver an integrated work-and-living environment that supports both economic growth and social well-being. As part of the improvements, roadworks are being planned on major routes, including the Mussafah–Al Ain Road (E30) and “Street 8,” to enhance traffic flow for all users, apart from facilitating the transport of commercial goods.

“Complementing these plans, DMT has increased its inspection operations and awareness campaigns targeting residents and business owners in the area to ensure compliance with municipal regulations and curb irregular practices, while also addressing unsightly visual and environmental disturbances,” reported TradeArabia.

The Acting Director General of Infrastructure Development at DMT, Eng. Eisa Mubarak Almazrouei said, “Mussafah plays a pivotal role as a key centre for industry and trade in Abu Dhabi. This study, undertaken alongside our strategic partners, aims to explore the adoption of innovative solutions in infrastructure, transportation and smart urban design to enhance the district’s competitiveness so it becomes a global benchmark for economic zones.”

“The measures are designed to enhance public health, safety and urban cleanliness, as well as support ongoing efforts to address residential overoccupancy. DMT will share additional information regarding the project and its various stages in due course,” the official concluded.

The post Abu Dhabi’s DMT unveils big Mussafah redevelopment plans appeared first on International Finance.

As Gulf countries ⁠diversify their economies away from oil, investing billions in sectors like financial services, hubs ⁠like the Dubai International Financial Centre have ‌been attracting an increasing number of companies. The total number of actively registered firms at the centre stood at around 8,840 ⁠as of the end of December 2025, up 28% from 2024. Active company registrations also increased by 2,525, a rise of 39% from the 2024 tally.

These included 557 wealth and asset management firms, which in recent years have been setting up base or ⁠expanding their footprint in Dubai and neighbouring Abu Dhabi as the UAE attracts high-net-worth individuals, helped by factors such as the relative ease ‍of doing business and low tax status.

“We had a slight uptick in the UK, and that probably has been a reflection of the growth in hedge funds that have been brought from that country,” DIFC Governor Essa Kazim told the media, while speaking about the geographical breakdown of firms at the centre. The Dubai International Financial Centre, meanwhile, is set for an around USD 27 billion expansion to be delivered by 2040, with the hub reaching full capacity, apart from seeking to welcome new firms.

Asked about funding for the project, Kazim said that the Dubai International Financial Centre achieved ⁠a net profit of around USD 400 million in 2025, remarking, “That is really the future cash flow that will contribute to the expansion, together with internal resources as well as a potential return ‌to capital ⁠markets. Definitely, the market is open. In the past, we issued sukuk, and that’s ⁠one possibility.”

In terms of operational profits, DIFC reported record annual results for 2025, posting double-digit growth in company registrations, revenue and net profit. Combined revenues rose 20% to Dhs2.13 billion (USD 580 million) in 2025 from Dhs1.78 billion in 2024, while net profit increased 28% to Dhs1.48 billion from Dhs1.16 billion. Dubai International Financial Centre has remained the region’s largest regulated financial services ecosystem, with 1,052 financial services firms operating in the hub.

The post Dubai International Financial Centre new registrations rise nearly 40% in 2025 appeared first on International Finance.

The developer has a land bank of 2.3 million square metres across Saadiyat Island (plots will house large-format villas and mansions) and Yas Island, according to a statement to the Abu Dhabi Securities Exchange (ADX).

The Yas Island plots, on the other hand, will be allocated to large-scale, master-planned family living communities supported by established retail, entertainment and lifestyle infrastructure, and the projects will be launched in a phased manner from 2026, in line with market demand, by a joint venture with an established partner to activate the land plots.

In an investor presentation in November 2025, Aldar Properties announced that its land bank in Abu Dhabi consists of a gross floor area (GFA) totalling 7.8 million square metres and a total land bank of 59.9 million square metres. The company’s revenue backlog in the UAE stands at AED 57.3 billion, with approximately AED 36–37 billion generated from Abu Dhabi.

The presentation also highlighted two major residential master plans in Abu Dhabi: Fahid Island, which has a gross development value (GDV) of AED 40 billion (approximately USD 11 billion), and a strategic development on Saadiyat Island, in joint venture with Mubadala, with a GDV of about USD 1.1 billion.

The news of Aldar Properties expanding its housing portfolio also comes at a good time, as Skyscanner’s “Travel Trends Report” sees the UAE likely emerging as one of the most popular destinations for international travellers in 2026, with Dubai, Abu Dhabi, and Sharjah being the most desired destinations.

The increase will be primarily due to holidaymakers seeking hotel experiences, and Dubai is leading the way in advance hotel bookings with a 89.7% increase in bookings over 2024.

“Germany, Switzerland, Canada, and South Korea are looking for destinations with comfort, culture, and unique experiences, and Sharjah has seen 101% more searches from German tourists attracted by its heritage sites and beaches, as well as low-cost flights, while Switzerland has seen a 99% increase in searches,” the report stated.

The post Aldar Properties to build 3,000 new homes in Abu Dhabi appeared first on International Finance.

The region’s unique position is also a draw as the GCC offers a middle-ground risk and return profile standing between the low-risk, low-yield markets of the West and the higher-risk, high-yield opportunities in the East.

Maturing markets reduce risk

Industry experts observe that the GCC’s political and economic environment has stabilised significantly in recent years. Hugh Morris, Senior Research Partner at the consultancy Z/Yen, explains that as the market matures, perceptions of geopolitical risk in the region have improved. A more stable environment has, in turn, enabled a growing pipeline of infrastructure projects.

With risks now seen as lower, more investors are willing to compete for opportunities in the Gulf than ever before. In a global investment climate where low-risk assets with decent yields are scarce, the GCC’s balanced risk-reward profile is especially compelling to international financiers.

This improved climate has paved the way for greater collaboration among lenders. International banks, armed with large pools of capital and expertise in complex project financing, are increasingly partnering with local GCC banks that have invaluable on-the-ground knowledge and relationships.

Together, these partnerships blend global financial power with local insight to ensure projects are funded and executed effectively. These synergies help major developments get off the ground, as each party brings complementary strengths to the table.

Even with these positive trends, project finance deals are not without challenges. Many projects span 20 or more years, with loan repayment schedules commonly stretching over 12 to 25 years. Critically, loans are usually repaid from the project’s own revenues once it is operational, as sponsors do not typically guarantee the debt.

This structure means lenders shoulder significant risk, since repayment hinges entirely on the project’s success. Naturally, banks expect to earn a premium interest rate in return for taking on this risk. However, competition in today’s market is pushing lenders to offer more attractive terms to win business, even as they must adhere to strict capital adequacy rules. Balancing risk-based pricing with competitive financing packages has become a key focus for Gulf banks.

Diversification drives mega-projects

Saudi Arabia and the United Arab Emirates (UAE) currently lead the region in large-scale project investments. A major driver behind this trend is the strategic push to diversify national economies away from oil and gas, building a sustainable post-oil future. Both countries benefit from centralised decision-making as directives from top leadership translate swiftly into infrastructure initiatives on the ground. For example, Saudi Arabia has embarked on pioneering projects in green hydrogen energy, and the UAE has made a bold entry into nuclear power. Saudi Arabia’s $50 billion Al Diriyah development near Riyadh aims to create a cultural and tourist hub, echoing Dubai’s success in drawing international visitors.

Despite this ambitious pipeline, not everything is rosy. A spokesperson for Bank ABC points out that there remains an estimated $5 trillion annual investment gap globally for clean energy, highlighting shortcomings in meeting climate targets after COP29.

The bank argues that financial institutions must play a greater leadership role in bridging this gap. This reality highlights why so many Gulf-based banks and investors are concentrating their efforts on funding renewable energy and other energy-transition projects.

Rise of social infrastructure

Another notable shift in the Gulf’s project finance landscape is the growth of social infrastructure projects such as hospitals, schools, and public amenities, which are often structured as public-private partnerships (PPPs). Ehab Nassar, a director at Fitch Ratings, observes that this trend is driven by the same strategy of reducing reliance on oil revenues.

Governments in the GCC have been ramping up PPP frameworks to tap private-sector capital and expertise for public projects. Until the late 2010s, true project finance deals outside the oil and gas sector were relatively limited. Since then, countries like Saudi Arabia and the UAE have introduced formal PPP programmes as part of their economic diversification agendas.

Not every major project in the region uses a PPP structure. For instance, Abu Dhabi’s Barakah nuclear power plant is a cornerstone of the UAE’s clean energy strategy. It was financed through a more traditional mix of government support and international investment rather than a typical PPP, combining debt and equity in its funding.

It was backed by over $18 billion in loans from the Abu Dhabi government and international lenders (including KEXIM), plus an equity investment of $4.7 billion from a joint venture between Emirates Nuclear Energy Corporation (ENEC) and Korea Electric Power Corporation (KEPCO).

Because the plant will help decarbonise the UAE’s power grid, the authorities classified its financing as a green loan, emphasising its contribution to the country’s green economy goals. In July 2023, once the plant was operational, two major Emirati lenders, Abu Dhabi Commercial Bank and First Abu Dhabi Bank, stepped in to refinance a large portion of the project’s debt, taking over the loan facilities that KEXIM had initially provided.

Innovative financing structures

Project financiers in the GCC are also experimenting with new deal structures to improve funding efficiency. One notable evolution, highlighted by Abbas Husain of Standard Chartered, is the use of “hard mini-perm” financing coupled with long-term off-take agreements.

In these arrangements, a project’s initial bank loan might have a shorter tenor, effectively requiring refinancing after a few years, while the project itself benefits from a long-term concession or purchase contract.

This approach shifts much of the refinancing risk to the off-taker and offers two key benefits. There are lower initial financing costs and greater liquidity from banks to kick-start construction. Such projects often plan to refinance later by issuing project bonds or securing longer-term commercial loans once the development is operational.

For infrastructure projects where the off-taker does not shoulder refinancing risk, developers typically secure long-term bank loans up front. Export credit agency (ECA) financing and other government-backed loans remain crucial in these cases, providing stability with low interest rates over long tenors and often coming with guarantees or insurance that enhance the project’s credit profile. By boosting the project’s credit quality in this way, such support makes it more attractive to a broader range of investors.

Refinancing for cost optimisation

Once projects are up and running, many Gulf sponsors seek to refinance their debt on better terms. According to Mazen Singer, a partner in infrastructure finance at PwC Middle East, most project owners look to refinance about five to eight years after a project becomes operational. By that stage, construction is complete, operations have stabilised, and revenue streams are more predictable.

The project’s risk profile improves significantly. Refinancing at this point can lower the overall cost of capital and optimise the debt structure. In some cases, it even allows sponsors to free up capital for new developments. If one waits much longer, those advantages diminish, and once a loan’s remaining term becomes short, the potential savings from refinancing are far more limited.

The pool of financiers and investors has also widened as the GCC market matures. Singer notes that more export credit agencies are now involved in Gulf projects. In addition, specialised infrastructure funds are drawn to mature, cash-generating (brownfield) assets, and local capital markets are growing more open to project bond issuances.

Husain of Standard Chartered adds that improved regulatory and governance frameworks, clearer procurement processes, and high-calibre project sponsors have made banks much more comfortable with regional project risks.

Strong sovereign support underpins many deals, and often the off-taker is a state-owned utility or the obligation is backed by a government ministry. This backing substantially reduces perceived credit risk and has enabled banks to offer financing at more competitive rates than in the past.

Thanks to an expanding track record of completed projects, investors now see a pipeline of successful ventures in the GCC, which builds confidence that each new project is a sound investment. These successes, and the collaborative financing behind them, demonstrate the Gulf governments’ determination to construct a prosperous post-oil future.

However, industry veterans caution that financial discipline is still needed. Hugh Morris cautions that regulators must prevent investors from over-leveraging projects and taking excessive returns, as such practices could undermine long-term infrastructure sustainability.

The future of project financing

While progress in Gulf project finance has been impressive, experts note certain challenges remain. One issue is the lack of historical precedent in the region for some project finance scenarios, which breeds uncertainty for lenders. For example, there is still little proven case law on how readily lenders can enforce their security interests if a project runs into trouble.

Another concern is limited transparency and information sharing, which makes it harder for outside investors to gauge project risks. All of these gaps point to the need for stronger legal and regulatory frameworks across the GCC to reduce uncertainty and build long-term confidence. Notably, regulatory development is not uniform across the bloc. The UAE and Saudi Arabia boast the most advanced frameworks and capital markets, while smaller economies are still catching up.

Industry analysts suggest several steps that could further strengthen the Gulf’s project finance ecosystem. One suggestion is the standardisation of PPP frameworks. Uniform PPP laws and contracts across the region would make projects more bankable and attract international lenders. Another idea is to develop secondary markets.

An active trading of infrastructure debt and equity would facilitate refinancing and let banks recycle capital into new projects. Finally, there is a shifting refinancing risk to off-takers. If utilities (project off-takers) bear future refinancing obligations, initial lenders can free up capacity, boosting liquidity for new projects.

With ongoing regulatory advancements and collaboration among stakeholders, the GCC is positioned to become a leader in the next phase of global infrastructure finance. However, sustaining this momentum will require more than just money. It also calls for developing human capital.

Analysts like Mazen Singer emphasise the importance of cultivating local expertise and institutional capacity in project finance. By training professionals and nurturing national champions in the industry, Gulf countries can ensure that the ambitious projects of today lead to a lasting legacy of knowledge and prosperity.

The post The Gulf’s new capital play appeared first on International Finance.

“The addition of Interactive Brokers strengthens the ADX’s efforts to broaden international investor participation and enhance global access to ADX-listed securities. This development builds on the ADX’s recent initiatives to expand market accessibility through select digital investment platforms such as Thndr and eToro, which have supported increased retail and regional engagement. In parallel, strengthening market connectivity, supported by partners such as the ICE Global Network, has further expanded the reach of the ADX’s data and broadened investor access,” reported the Emirates News Agency (WAM).

“Interactive Brokers has enabled its global client base to access Abu Dhabi’s capital markets and trade all ADX-listed securities directly alongside more than 160 markets. UAE-based investors will also benefit from the platform’s multi-currency account support, including AED, and FX conversions for funding and trading. The onboarding aligns with ADX’s strategy to deepen liquidity, diversify investor channels, and expand access to a growing suite of investment products spanning equities, ETFs, derivatives, fixed income, and digital trading solutions,” WAM noted.

Commenting on the announcement, Abdulla Salem Alnuaimi, Group Chief Executive Officer of the ADX Group, said, “We are pleased to welcome Interactive Brokers as one of our key retail investor partners. Their presence underscores the increasing global interest in Abu Dhabi’s market and reflects the strength of the ADX’s infrastructure, product range, and commitment to seamless investor access. As a capital market gateway and investment hub, the ADX is proactively expanding our channels through which international investors can participate in our markets, invest in our high-growth listed companies and achieve their goals. We believe that Interactive Brokers will further contribute to deepening liquidity, strengthening global links, and enhancing the overall trading experience. We look forward to working closely with them to support sustained growth and greater investor participation.”

Milan Galik, chief executive of Interactive Brokers, said, “As market participants seek to uncover new investment opportunities around the world, adding UAE equities offers both local and international investors access to the economic growth afforded by this dynamic region, alongside products from over 160 other global markets on the same platform.”

Throughout 2025, Interactive Brokers aggressively enhanced its Middle East footprint. In July, the firm announced a collaboration with HSBC to deliver a new trading solution to provide a single platform to trade assets in the UAE.

Through this new alliance, HSBC’s UAE-based clients will have access to WorldTrader, powered by Interactive Brokers, a new digital investment platform allowing customers in the Gulf country to trade equities, ETFs, and bonds in 25 markets across 77 exchanges. The suite of services provided by WorldTrader includes powerful technology and trading tools, competitive pricing, and access to global markets.

The post ADX Group onboards ‘Interactive Brokers’ as Abu Dhabi eyes becoming investors’ hub appeared first on International Finance.

The region’s unique position is also a draw as the GCC offers a middle-ground risk and return profile standing between the low-risk, low-yield markets of the West and the higher-risk, high-yield opportunities in the East.

Market maturity lowers risk

Industry experts observe that the GCC’s political and economic environment has stabilised significantly in recent years. Hugh Morris, Senior Research Partner at the consultancy Z/Yen, explains that as the market matures, perceptions of geopolitical risk in the region have improved. A more stable environment has, in turn, enabled a growing pipeline of infrastructure projects.

With risks now seen as lower, more investors are willing to compete for opportunities in the Gulf than ever before. In a global investment climate where low-risk assets with decent yields are scarce, the GCC’s balanced risk-reward profile is especially compelling to international financiers.

This improved climate has paved the way for greater collaboration among lenders. International banks, armed with large pools of capital and expertise in complex project financing, are increasingly partnering with local GCC banks that have invaluable on-the-ground knowledge and relationships.

Together, these partnerships blend global financial power with local insight to ensure projects are funded and executed effectively. These synergies help major developments get off the ground, as each party brings complementary strengths to the table.

Even with these positive trends, project finance deals are not without challenges. Many projects span 20 years or more, with loan repayment schedules commonly stretching over 12 to 25 years. Critically, loans are usually repaid from the project’s own revenues once it is operational, as sponsors do not typically guarantee the debt.

This structure means lenders shoulder significant risk, since repayment hinges entirely on the project’s success. Naturally, banks expect to earn a premium interest rate in return for taking on this risk. However, competition in today’s market is pushing lenders to offer more attractive terms to win business, even as they must adhere to strict capital adequacy rules. Balancing risk-based pricing with competitive financing packages has become a key focus for Gulf banks.

Diversification drives mega-projects

Saudi Arabia and the United Arab Emirates (UAE) currently lead the region in large-scale project investments. A major driver behind this trend is the strategic push to diversify national economies away from oil and gas, building a sustainable postoil future.

Both countries benefit from centralised decision-making, as directives from top leadership are translated swiftly into infrastructure initiatives on the ground. For example, Saudi Arabia has embarked on pioneering projects in green hydrogen energy, and the UAE has made a bold entry into nuclear power. Saudi Arabia’s $50 billion Al Diriyah development near Riyadh aims to create a cultural and tourist hub, echoing Dubai’s success in drawing international visitors.

Despite this ambitious pipeline, not everything is rosy. A spokesperson for Bank ABC points out that there remains an estimated $5 trillion annual investment gap globally for clean energy, highlighting shortcomings in meeting climate targets after COP29.

The bank argues that financial institutions must play a greater leadership role in bridging this gap. This reality highlights why many Gulf-based banks and investors are focusing their efforts on funding renewable energy and other energy transition projects.

Rise of PPPs and social infrastructure

Another notable shift in the Gulf’s project finance landscape is the growth of social infrastructure projects such as hospitals, schools, and public amenities, which are often structured as public-private partnerships (PPPs). Ehab Nassar, a director at Fitch Ratings, observes that this trend is driven by the same strategy of reducing reliance on oil revenues.

Governments in the GCC have been ramping up PPP frameworks to tap private-sector capital and expertise for public projects. Until the late 2010s, true project finance deals outside the oil and gas sector were relatively limited. Since then, countries like Saudi Arabia and the UAE have introduced formal PPP programmes as part of their economic diversification agendas.

Not every major project in the region uses a PPP structure. For instance, Abu Dhabi’s Barakah nuclear power plant, a cornerstone of the UAE’s clean energy strategy, was financed through a more traditional mix of government support and international investment rather than a typical PPP, combining both debt and equity in its funding.

It was backed by over $18 billion in loans from the Abu Dhabi government and international lenders (including KEXIM), plus an equity investment of $4.7 billion from a joint venture between Emirates Nuclear Energy Corporation (ENEC) and Korea Electric Power Corporation (KEPCO).

Because the plant will help decarbonise the UAE’s power grid, the authorities classified its financing as a green loan, emphasising its contribution to the country’s green economy goals. In July 2023, once the plant was operational, two major Emirati lenders, Abu Dhabi Commercial Bank and First Abu Dhabi Bank, stepped in to refinance a large portion of the project’s debt, taking over the loan facilities that KEXIM had initially provided.

New financing structures

Project financiers in the GCC are also experimenting with new deal structures to improve funding efficiency. One notable evolution, highlighted by Abbas Husain of Standard Chartered, is the use of “hard mini-perm” financing coupled with long-term off-take agreements.

In these arrangements, a project’s initial bank loan might have a shorter tenor, effectively requiring refinancing after a few years, while the project itself benefits from a long-term concession or purchase contract.

This approach shifts much of the refinancing risk to the off-taker and offers two key benefits. There are lower initial financing costs and greater liquidity from banks to kick-start construction. Such projects often plan to refinance later by issuing project bonds or securing longer-term commercial loans once the development is operational.

For infrastructure projects where the off-taker does not shoulder refinancing risk, developers typically secure long-term bank loans up front. Export credit agency (ECA) financing and other government-backed loans remain crucial in these cases, providing stability with low interest rates over long tenors and often coming with guarantees or insurance that enhance the project’s credit profile. By boosting the project’s credit quality in this way, such support makes it more attractive to a broader range of investors.

Refinancing for cost gains

Once projects are up and running, many Gulf sponsors seek to refinance their debt on better terms. According to Mazen Singer, a partner in infrastructure finance at PwC Middle East, most project owners look to refinance about five to eight years after a project becomes operational. By that stage, construction is complete, operations have stabilised, and revenue streams are more predictable.

The project’s risk profile improves significantly. Refinancing at this point can lower the overall cost of capital and optimise the debt structure. In some cases, it even allows sponsors to free up capital for new developments. If one waits much longer, those advantages diminish, and once a loan’s remaining term becomes short, the potential savings from refinancing are far more limited.

The pool of financiers and investors has also widened as the GCC market matures. Singer notes that more export credit agencies are now involved in Gulf projects. In addition, specialised infrastructure funds are drawn to mature, cash-generating (brownfield) assets, and local capital markets are growing more open to project bond issuances.

Husain of Standard Chartered adds that improved regulatory and governance frameworks, clearer procurement processes, and high-calibre project sponsors have made banks much more comfortable with regional project risks.

Strong sovereign support underpins many deals, and often the off-taker is a state-owned utility or the obligation is backed by a government ministry. This backing substantially reduces perceived credit risk and has enabled banks to offer financing at more competitive rates than in the past.

Thanks to an expanding track record of completed projects, investors now see a pipeline of successful ventures in the GCC, which builds confidence that each new project is a sound investment. These successes, and the collaborative financing behind them, demonstrate the Gulf governments’ determination to construct a prosperous post-oil future.

However, industry veterans caution that financial discipline is still urgently needed. Hugh Morris warns that regulators must carefully prevent investors from over-leveraging projects and taking excessive returns, as such practices could ultimately end up undermining long-term infrastructure sustainability in the region.

Future of GCC financing

While progress in Gulf project finance has been impressive, experts note certain challenges remain. One issue is the lack of historical precedent in the region for some project finance scenarios, which breeds uncertainty for lenders. For example, there is still little proven case law on how readily lenders can enforce their security interests if a project runs into trouble.

Another concern is limited transparency and information sharing, which makes it harder for outside investors to gauge project risks. All of these gaps point to the need for stronger legal and regulatory frameworks across the GCC to reduce uncertainty and build long-term confidence. Notably, regulatory development is not uniform across the bloc. The UAE and Saudi Arabia boast the most advanced frameworks and capital markets, while smaller economies are still catching up.

Industry analysts suggest several steps that could further strengthen the Gulf’s project finance ecosystem. One suggestion is the standardisation of PPP frameworks. Uniform PPP laws and contracts across the region would make projects more bankable and attract international lenders. Another idea is to develop secondary markets.

An active trading of infrastructure debt and equity would facilitate refinancing and let banks recycle capital into new projects. Finally, there is a shifting refinancing risk to off-takers. If utilities (project off-takers) bear future refinancing obligations, initial lenders can free up capacity, boosting liquidity for new projects.

With continued regulatory innovation and collaboration among stakeholders, the GCC is well-positioned to emerge as a leader in the next phase of global infrastructure finance. However, sustaining this momentum will require more than just money. It also calls for developing human capital.

Analysts like Mazen Singer emphasise the importance of cultivating local expertise and institutional capacity in project finance. By training professionals and nurturing national champions in the industry, Gulf countries can ensure that the ambitious projects of today lead to a lasting legacy of knowledge and prosperity.

The post Gulf moves beyond oil reliance appeared first on International Finance.

The international investment arm of ADNOC (Abu Dhabi National Oil Company), XRG, said that some of the Commission’s information requests appear irrelevant to the deal.

“Clearly, if such a decision were taken, we would be very disappointed. Some of the information requests are unreasonably broad and unrelated to this transaction. That said, we are committed to finding a constructive path forward so that the agreement can be concluded promptly,” an XRG spokesperson told Reuters, referring to the temporary halt in the EU investigation.

ADNOC’s acquisition of Covestro in October 2024 was the largest to date and marked one of the biggest foreign takeovers of an EU company by a Gulf state. Among Covestro’s products are foam chemicals used in car seats, mattresses, and building insulation.

The European Commission, which has been reviewing the deal under its foreign subsidies rules since May, conducted an in-depth investigation recently, while issuing a warning that subsidies granted by the UAE could distort the EU internal market. The probe, supposed to look into possible negative effects in the internal market resulting from the merged company’s activities once the deal is concluded, will be under the media limelight, as the Commission has set December 2 as the deadline for its decision on the deal.

Talking about Covestro, the German chemicals maker recently missed its second-quarter sales expectations, as US trade policies weighed on prices, but expressed confidence its takeover by ADNOC would be sealed by the end of 2025 despite EU hurdles.

Covestro, whose products include foam chemicals used in mattresses, car seats and insulation for buildings, said the clouds of United States higher tariffs had led to a huge oversupply of products to the market there, particularly from the Asia-Pacific region, which had then caused a big drop in prices.

The company’s revenues fell 8.4% to 3.38 billion euros (USD 3.86 billion) in April-June, missing analysts’ average estimate of 3.55 billion euros in a company-provided consensus.

“At the moment, demand is too weak to absorb the partial oversupply,” Chief Financial Officer Christian Baier told Reuters in an interview.

In July, Covestro cut its full-year earnings forecast for the second time this year. It now sees earnings before interest, taxes, depreciation and amortisation within a range of 700 million euros to 1.1 billion euros, down from a previously expected 1 billion euros to 1.4 billion euros.

The post European Union regulators set to pause subsidy probe into ADNOC’s Covestro deal appeared first on International Finance.