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Project Finance in Dubai.

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Project Finance Legal Services in Dubai and the UAE

Project finance is a specialist form of structured lending in which the lenders' primary security is the project's future cash flows rather than the sponsor's balance sheet. It is the dominant financing structure for large infrastructure, energy, and real estate development projects in the UAE — including power plants, desalination facilities, transportation infrastructure, hospitals and large-scale mixed-use developments. Al Safar & Partners advises sponsors, lenders, government entities and EPC contractors on all aspects of project finance transactions in the UAE and across the wider Gulf region.

Project Finance Transactions We Advise On

  • Energy Projects: Power generation, renewable energy (solar, wind), and desalination project financings — including DEWA and ADWEA-backed projects.
  • Real Estate Development Finance: Construction and term financings for large-scale residential, commercial and mixed-use developments in Dubai and Abu Dhabi.
  • Infrastructure PPPs: Public-private partnership agreements and the financing structures that support them — road, rail, port and airport concessions.
  • Islamic Project Finance: Sharia-compliant project finance structures including Istisna'a (construction finance), Ijara (lease finance) and Musharaka (equity participation) structures.
  • Refinancings: Refinancing of existing project debt — extending maturities, reducing interest costs, or releasing equity from completed and operational projects.

Key Legal Elements We Handle

Project finance transactions involve extensive legal documentation covering: the financing agreements (facility agreement, inter-creditor agreement, security documents), the project documents (concession agreement, off-take agreement, EPC contract, O&M agreement), government support documents (direct agreements, guarantees), and the security package. We draft, review and negotiate all of these documents, advising on UAE-specific issues including UAE security law, mortgage registration, and the interface between UAE Civil Code and specific project regulatory frameworks.

Security Structures Under UAE Law

Creating effective security over project assets in the UAE requires compliance with UAE Mortgage Law, security assignment requirements, and (for DIFC-based transactions) DIFC security interests legislation. We advise on the most effective and legally robust security structures, coordinate registration with the relevant authorities, and advise on enforcement if a project encounters difficulties.

Common Questions

Frequently Asked Questions

Project finance is non-recourse or limited-recourse lending — the lenders look primarily to the project's cash flows and assets as repayment, rather than the sponsor's general creditworthiness. The project is ring-fenced in a special purpose vehicle (SPV). This allows sponsors to finance large projects off-balance-sheet and align the risk profile of the financing with the specific risks of the project.
For regulated infrastructure sectors (power, water, transportation), the government or its entities typically provide the off-take or concession agreement that underpins the project's revenue stream. Government support documents — direct agreements, letters of support, step-in rights and, in some cases, guarantees — are critical to lender comfort. We advise on government support documentation from both the lender and sponsor perspective.
Islamic project finance uses Sharia-compliant instruments instead of conventional interest-bearing debt. Common structures include: Istisna'a for the construction phase (a manufacturing contract where the bank contracts to deliver a completed asset), Ijara for the operational phase (a lease arrangement), and Diminishing Musharaka for equity-like structures. We work with leading UAE Islamic banks and their Sharia supervisory boards on these structures.
UAE project security typically covers: mortgage over project real estate (registered with the relevant land authority), assignment of project documents (concession, off-take, EPC, insurance policies), pledge of SPV shares, pledge of accounts, and in some cases assignment of government receivables. DIFC-domiciled SPVs benefit from a more flexible security regime under DIFC law. We advise on the most effective security package for each transaction.
Yes. Foreign banks are active lenders in the UAE project finance market — including European banks, Asian development institutions and Islamic finance providers. Some regulatory considerations apply to foreign lenders operating without a UAE branch, but the documentation and security structures are well-established. We advise both UAE-licensed and foreign lenders on UAE project finance transactions.

Advise on Your Project Financing

Al Safar & Partners — trusted lawyers in Dubai since 1979. Contact us today for expert legal advice.

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