French utility Engie secures funding for its largest solar park in Abu Dhabi

French utility Engie announced on Monday that it has achieved financial closing for a 1.5-gigawatt solar park in Abu Dhabi, marking its largest solar project worldwide. 

This move is part of the company's strategy to accelerate projects in the rapidly expanding Middle East market, counteracting a deceleration in renewables growth observed in the US and Europe.

Under a 30-year power purchase agreement with Emirates Water and Electricity Company, the Khazna park is slated to begin commercial operations in 2028, Engie said in an official release. 

Once operational, it is expected to supply 160,000 homes with solar power throughout the United Arab Emirates.

Financial closing signifies the point at which all necessary funding agreements have been executed, enabling the project to commence expenditure.

Engie's broad Gulf footprint

Engie, a global leader in low-carbon energy and services, maintains a significant operational footprint in the Gulf region, focusing on key infrastructure vital to the area's power and water needs. 

The company's portfolio in the Gulf includes approximately 25 gigawatts (GW) of gas-fired power plants, which are crucial for meeting the region's substantial electricity demand. 

In addition to power generation, Engie operates extensive cooling networks, essential for managing the high ambient temperatures characteristic of the Gulf climate, serving various commercial and residential centres. 

Furthermore, the company is a major player in water production, managing desalination plants with a combined capacity to produce 5 million cubic metres of potable water per day. 

This substantial water output underscores Engie's critical role in the region's water security, supporting both municipal consumption and industrial requirements in one of the most water-scarce areas globally. 

Engie's integrated operations, encompassing power, cooling, and desalination, position it as a foundational partner in the Gulf's energy and utilities sector.

Leveraging the region's increasing electricity demand, ample land, and abundant sunshine, the company is now optimistic about rapidly achieving its goal of 95 GW of installed renewable capacity by 2030, a significant increase from its current capacity of approximately 55 GW.

"This is a key region that can play a big role for Engie's ambitions given the size of projects, so it will contribute an important amount of our renewables growth through 2035 because there's an enormous amount of demand," Niko Cornelis, Engie's country manager for the Gulf Cooperation Council, was quoted in a Reuters report. 

Equity, financing, and regional strategy

According to Cornelis, the company is engaging in several tenders. Notably, projects in Saudi Arabia are substantial, ranging from 0.5 to 2 GW.

This contrasts with European solar tenders, which are considerably smaller.

US President Donald Trump's halt on the offshore wind sector has frozen two of Engie's early-stage projects in the US.

Cornelis said:

State-owned Masdar is required to maintain a 60% stake in all projects in Abu Dhabi, a rule that reflects similar partnership requirements in other countries throughout the region.

The Khazna scheme's equity is divided, with Masdar holding a 60% stake and Engie the remaining 40%. 

The project secured financing from seven international banks, including Credit Agricole Corporate and Investment Bank and Abu Dhabi Islamic Bank.