Abu Dhabi National Oil Company (Adnoc) and Abu Dhabi National Energy Company PJSC (Taqa) have reached financial close on their US$3.8 billion project to power and decarbonize Adnoc’s offshore production operations.

The project is a first-of-its-kind high-voltage direct current (HVDC) subsea transmission network for the Middle East and North Africa region. The transmission system will have a total installed capacity of 3.2 gigawatts and will comprise two independent sub-sea HVDC links and converter stations. Commercial operation is expected to commence in 2025.

A consortium comprising Korea Electric Power (Kepco), Kyushu Electric Power Company (Kyuden) and Électricité de France (EDF) collectively holds a 40% stake in the project on a build, own, operate and transfer (BOOT) basis, with Adnoc and Taqa each owning a 30% stake. The full project will be returned to Adnoc after 35 years of operation.

The project was initially announced in December 2021. Given higher interest rates at the time of financial close, the total project cost is estimated to have risen to US$3.8 billion from the originally announced US$3.6 billion.

The combined investment from the consortium, commercial lenders and export credit agencies has yielded more than US$3 billion in foreign direct investment.

Commenting on the successful financial close of the transaction, Sultan Al Jaber, United Arab Emirates’ minister of industry and advanced technology, says Adnoc has once again demonstrated its ability to successfully structure and close a bold and progressive transaction, which will help secure a low-carbon future as decarbonization efforts are intensified.  Al Jaber is also UAE‘s special envoy for climate change and managing director and group chief executive officer of Adnoc.

The undersea transmission network is expected to reduce the carbon footprint of Adnoc’s offshore operations by more than 30%, replacing existing offshore gas turbine generators with more sustainable power sources available on the Abu Dhabi onshore power network, operated by Taqa’s wholly owned subsidiary, Abu Dhabi Transmission and Despatch Company (Transco).

More than 50% of the value of the project will flow back into the UAE’s economy under Adnoc’s in-country value (ICV) programme. The transaction also sets another benchmark for large-scale investment of leading global energy companies into the UAE and Adnoc.