United Arab Emirates
Project Financing

Includes how major projects are financed and gives examples where relevant. Explains activities of the multilateral development banks in and other aid-funded projects where procurement is open to U.S. bidders

Last published date: 2019-10-13
The UAE holds title to major government owned corporations to which many projects are affiliated.  Mubadala Investment Company, the Abu Dhabi sovereign wealth fund resulting from the merger of Mubadala Development Company with International Petroleum Investment Company in January 2017,  launched multiple projects in the UAE ranging from aerospace, renewables, petrochemicals, utilities, metals and mining, to healthcare, technology, real estate and  infrastructure, finance, defense, and education.  The three major holding companies wholly owned by the Emirate of Dubai, Dubai World, Dubai Holding, and Investment Corporation of Dubai, launched projects in the UAE ranging from aerospace and air transport, maritime transport and logistics, real estate and urban development, investments and financial services, metals and construction material, to hospitality and leisure, retail, technology and communications, and energy and natural resources.  

The development of projects requiring financing is broadening.  From nuclear power and desalination complexes through petrochemical plants, gas development, and transportation projects, the role of the private sector in large-scale projects is becoming more varied and important.  Major international and local banks are behind these projects advising and arranging for the major part of the financing using a variety of sophisticated instruments: bonds, sukuks (Islamic bonds), loans, syndicated loans, murabaha (Islamic loans), initial public offerings, etc.  The proportion of financing and the transaction leadership is steadily shifting towards local and regional banks, including in some cases, Islamic banks.

Securities and Commodities Markets
Emirates Securities and Commodities Authority (SCA) is the governing body for all the stock exchanges, securities and commodities listed in the UAE except for the ones that are in the financial free zones. 

The Dubai International Financial Centre (DIFC) is a financial free zone that opened in 2004 under the regulatory authority of an independent body, the Dubai Financial Services Authority (DFSA). 

Similar to DIFC, the emirate of Abu Dhabi launched the operations of the Abu Dhabi Global Market (ADGM) in October 2015.  This new financial center is also regulated by its own independent body, the Financial Services Regulatory Authority (FSRA).   
The Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) that opened in 2000 are regulated by the SCA.  The SCA electronically links both bourses in what it calls the Emirates Securities Market (ESM).  They are the most prominent stock exchanges in the country.  More than 200 stocks and a dozen of sukuks and bonds are listed in the DFM and ADX combined. 
The Dubai Gold and Commodities Exchange (DGCX), founded in 2005 in the Dubai Multi Commodities Centre (DMCC) as the region’s first commodity derivatives exchange, is also regulated by the SCA. 

In 2005, Nasdaq Dubai stock exchange opened in DIFC under DFSA’s regulatory authority.  After years of low trading volumes, all clearing, trading, settlement and custody functions for Nasdaq Dubai equities have migrated and are being outsourced to the DFM’s systems. To date, only 8 stocks are listed in Nasdaq Dubai, and most other securities traded are sukuks and bonds.