Al Dhafra Power Plant Financed To Deliver 1GW Baseload Power For UAE AI Data Centres

The Abu Dhabi National Energy Company PJSC, known as TAQA, and Emirates Water and Electricity Company have reached financial close on the AED3.6 billion Al Dhafra Power Plant. The 1GW gas-fired facility will supply power to AI data centre projects and support the UAE National Strategy for Artificial Intelligence 2031.

The plant will deliver flexible baseload electricity that can respond quickly to changes in demand from digital infrastructure. This capability is designed to help integrate larger volumes of renewable power into the grid, while supporting secure supply for high-intensity AI data processing across the UAE and the wider region.

Project sponsors highlight the link between the new plant and the country’s wider AI ambitions. Mohamed Almarzooqi, Chief Asset Development and Management Officer of EWEC, said, "As a key enabler of the UAE National Strategy for Artificial Intelligence 2031, Al Dhafra Power Plant provides the critical energy infrastructure required to power the next generation of data centres and strengthen the nation’s position as a global leader."

Almarzooqi added that the station’s role extends beyond immediate digital demand. "Furthermore, the flexible baseload power that will be delivered by this plant complements our growing pipeline of utility-scale renewables and battery storage, providing the essential transitional capacity needed to integrate significantly higher levels of clean energy into the grid."

The project reached financial close with an investment of AED3.6 billion, with about 85 percent arranged through debt. Both local and international lenders are involved, reflecting strong banking sector interest in UAE power assets linked to digital and low-carbon growth, alongside support for long-term contracted infrastructure.

TAQA holds 100 percent ownership of the Al Dhafra project company and the operation and maintenance entity. TAQA will build, own and operate the 1GW plant under this structure. A 24-year Power Purchase Agreement with EWEC, signed in April, underpins the project’s revenues and provides predictable offtake for the generated power.

Al Dhafra Power Plant lender list and project funding mix

The lending group includes banks from the UAE, the wider GCC, Asia and Europe. Debt has been arranged with Standard Chartered Bank, Abu Dhabi Commercial Bank, Agricultural Bank of China, Doha Bank, First Abu Dhabi Bank, HSBC, ICBC, KFW, National Bank of Kuwait, RAK Bank, Woori Bank, Abu Dhabi Islamic Bank PJSC, Boubyan Bank and Ajman Bank.

Al Dhafra Power Plant construction progress and AI-driven demand

Construction on the Al Dhafra Gas Turbine project has already started, with development advancing at an accelerated pace. TAQA has overseen the scheme from concept through development and into the build phase, then on to financial close, moving through these stages faster than its typical large-scale thermal projects.

Dr. Frank Possmeier, Chief Investment Officer of TAQA’s Generation business, linked this pace to changing demand trends. "AI represents a major opportunity for both economic growth and increased energy demand. Meeting this demand requires an agile, secure, and sustainable energy mix that prioritises decarbonisation and flexibility," said Dr. Frank Possmeier, Chief Investment Officer, TAQA’s Generation business. "The Al Dhafra Gas Turbine Power Plant exemplifies this approach."

According to Possmeier, TAQA’s progress from inception to financial close highlights intent to serve new loads. TAQA has taken the project from inception to development, through to beginning construction, and now to financial close at record speed —demonstrating its agility and commitment to supporting the rapid growth in energy needs driven by AI data centres. He added that the plant also plays a crucial role in providing flexible baseload power that enables greater integration of renewable energy into the system.

Al Dhafra Power Plant links to renewables, storage and grid upgrades

TAQA Transmission, a unit within TAQA Group, will develop grid infrastructure to connect Al Dhafra’s capacity to emerging demand centres. These upgrades aim to deliver reliable power with a lower carbon footprint, especially to AI and cloud data hubs that require stable electricity round the clock.

The Al Dhafra plant is also tied to a wider AED36 billion investment package in Abu Dhabi energy infrastructure announced by EWEC, TAQA and Masdar. Within this framework, Al Dhafra supports a Masdar-led project designed to dispatch renewable energy on a 24-hours-a-day, seven-days-a-week basis for customers.

That Masdar programme will deliver up to 1GW of baseload power each day from renewable energy, using what is described as the largest combined solar and battery energy storage system in the world. This system will also feed AI data centres, aligning with the same digital growth drivers behind the gas-fired Al Dhafra facility.

Al Dhafra Power Plant within TAQA and Masdar long-term plans

Through TAQA’s 43 percent stake in Masdar’s renewable energy company, both firms are linked in their expansion plans. Joint activity across gas, solar and storage projects is positioned to balance system stability with increased low-carbon generation, particularly as AI and data workloads expand.

TAQA has set a target to reach 150 GW of gross power generation capacity by 2030 across its portfolio. The rapid progress of the Al Dhafra Power Plant, combined with Masdar’s large-scale renewable and storage project, is presented by the companies as evidence that TAQA remains on track to meet this growth objective.

With inputs from WAM