By Nicolas Jarrosson, Executive Director Nicolas.Jarrosson@TribeIG.com
Over the last 20 years as Public-Private Partnership (PPP) and project finance have become mainstream in the utilities sector in the Gulf Cooperation Council (GCC), the structure of the procurer security package within the broader risk allocation framework—particularly concerning credit support—has undergone notable shifts, driven by various market dynamics.
In the early days (late 1990s to early 2000s), power and water procurers, regardless of their country’s credit rating, were required to provide credit support through Ministry of Finance (MoF) guarantees. This approach was necessary to establish nascent schemes and attract sponsors and lenders that had limited visibility on the payment history of procuring entities and the robustness of the framework. These guarantees were critical in mitigating concerns over risks such as payment delays or failures in monthly payment obligations, and less frequently but significantly larger, termination payments owed by the procurer in cases of default—whether triggered by the Project Company, the procurer, or due to force majeure events.
Over the past 15 years, Ministry of Finance payment guarantee has been maintained in the utilities sector for a range of reasons:
Power & Water procuring authorities in the GCC are typically state-owned companies, legally distinct from Government bodies despite typical 100% Government ownership – and could therefore technically actually go bankrupt in case of failure of support (funding) by the Government.
Power and Water remains highly critical assets in the GCC, and MoF guarantee demonstrates the level of direct support by each government (and to a certain extent ensures speed of roll-out).
Some regional Procurers / Governments have a credit profile (based on country rating) that does not allow departure from such direct guarantees. These guarantees are particularly critical for securing bank debt funding liquidity for individual projects, which often exceed US$1 billion in capital expenditure—especially when these projects are part of a larger fleet under development.
In recent years, the expansion of PPPs and non-recourse project finance into other sectors of the economy—particularly social infrastructure—has driven a significant shift away from the traditional Ministry of Finance (MoF) guarantee template. Tendering authorities such as the NCP (National Center for Privatization) in Saudi Arabia and ADIO (Abu Dhabi Investment Office) in Abu Dhabi have tested the market appetite for and implemented alternative credit support in the form of Letters of Support. These alternatives are advantageous for governments, as they do not trigger the same liability disclosures in their budgets as direct MoF guarantees, thereby supporting their ongoing negotiations with rating agencies.
It is positive to note that this shift has not hindered the launch of projects in new sectors, including the Al Ansar healthcare project (first banked healthcare PPP in the region), student and worker accommodations, courthouses, bus transport, and schools in KSA and the UAE in particular.
However, it is important to flag that for most of those social infrastructure projects, the procurer is typically a Ministry or Department that is directly part of the government. As such, it generally has direct access to the state budget, which diminishes, to some extent, the necessity and benefits of an MoF guarantee.
Based on our extensive discussions with a large spectrum of lenders on regional projects as part of Tribe’s Financial Advisory mandates on transactions across sectors, including those recently tendered or developed under a Letter of Support framework, it is important to highlight that the market continues to see significant challenges with this framework:
Firstly, although the counterparty (Procurer) typically is a government body, they carry a different risk profile as MoF, holder of the state’s income with the upper hand on distribution of budget funds. This distinction might be more “optical” than fully based on facts, but is nevertheless an important discrepancy in the perception by the different market stakeholders.
Secondly, unlike local sponsors and lenders being more aware of the government construct and certainty of cashflows to Government Procuring bodies, foreign sponsors and lenders could find it significantly more difficult to navigate the different “budget appropriation” concepts of each specific government in the region. This can lead to higher perceived project risks, particularly when there is limited transparency regarding whether termination payments in the event of default are explicitly and securely covered, given that ministries’ budget allocations are typically structured on an annual basis.
Furthermore, some procuring entities are currently pushing for such MoF Letters of Comfort to be drafted on the basis of it being addressed to the procuring entity as opposed addressed to the Project Company, which render them even more difficult to be assessed by sponsors and lenders as a robust credit support.
Finally, Letter of Support have mostly been successfully used for projects of comparatively smaller size (i.e. ~$500m capex / debt soft ceiling), probably due to typical the smaller size of social infrastructure projects (excluding large transportation schemes) and the available funding liquidity from local lenders for such amounts not requiring access to international lenders and larger bank groups to increase access to liquidity.
From the same market feedback, improvements in the process of handling Letter of Support by procuring entities could also be improved for better access to a wider pool of lenders, including optimizing appetite of international lenders (and therefore reducing funding costs and tariffs to procurers), such as:
There is benefit for procuring entities (supported by their legal advisors) to prepare, as part of the bid documentation, some detailed information in relation to the status, position and legal standing of the Procurer as part of the Government structure as well as the working of the budget allocation against Procurer payment obligations under the concession agreement. Yes, this could be done by each bidder’s Sponsors Legal Advisor or Lenders Legal Advisor as part of their Due Diligence – in partnership with their local affiliated law firms. But preparing and sharing it upfront by Procurer would go a long way to demonstrate to stakeholders the quality of the Procurer’s bid preparation work and improve project attractiveness, especially in the case of new sector / Procurer reaching out to the market for their first project.
Finally, including drafts of Letters of Support in the RfP documentation early on is highly beneficial, as it provides clarity to sponsors and lenders. Delays in providing these drafts—especially close to the bid date, or not at all — can hinder efforts to attract international lenders and broaden profile of sponsors. Their participation being typically a significant advantage of PPP tenders for GCC governments and a key strategic target of such procurement schemes.
In conclusion, credit support structures have been a cornerstone of project bankability in the GCC since their inception in the late 1990s. These structures have evolved to balance market requirements with the need to minimise their impact on national balance sheets and credit ratings, adapting to varying dynamics across countries, procurers, sectors, and market appetites. Striking this balance remains a delicate task for procurers and their advisors, requiring regular reassessment to align with market conditions while ensuring the cost competitiveness of services provided to the population.
Tribe Advisory is guiding its client, Dubai Municipality, on the landmark Dubai Strategic Sewerage Tunnels (DSST) project. The project has an estimated CAPEX of 30 billion (US$8 billion) and a total lifecycle cost of AED 80 billion.
The DSST will modernise Dubai’s sewerage system by transitioning from a pumped to a gravity-based system, decommissioning pump stations for greater sustainability.
The project includes 75 kilometres of deep wastewater tunnels, comprising:
Bur Dubai Deep Tunnel: 50 kilometres
Deira Deep Tunnel: 25 kilometres
Supporting infrastructure consists of 140 kilometres of link sewers and two major terminal pump stations. The tunnels will reach depths of up to 90 meters underground, ensuring efficient wastewater management across the city.
The DSST project, which will comprise 4 separate packages, is currently in the tender phase, with the first package planned to be awarded in late 2025.
Tribe Advisory’s Role
As the lead and financial advisor to Dubai Municipality, Tribe Advisory has played a pivotal role in the development of the DSST. Tribe’s responsibilities as lead and financial advisor span multiple critical areas, from overall project and programme management, stakeholder engagement and management, securing Government approvals and budget allocation from Department of Finance, business case development and ensuring the project’s alignment with strategic goals, financial feasibility, and stakeholder expectations.
Key contributions include:
Strategic Guidance: Tribe provided end-to-end strategic support, helping Dubai Municipality navigate complex contractual, financial, and operational frameworks while maintaining focus on long-term sustainability and cost efficiency.
Project and Programme Management: Tribe is managing other overall project procurement programme, comprising 4 individual project packages. Vrall management of the time line and advisory consortium delivarables
Feasibility Studies: Tribe conducted an in-depth feasibility study for the entire project, evaluating technical, financial, and operational aspects. This analysis identified challenges and opportunities, presenting clear insights to stakeholders on the project’s financial benefits, value for money and long-term viability.
Stakeholder Engagement: Tribe Advisory effectively communicated the project’s objectives, opportunities, and risks to key stakeholders, ensuring alignment across all parties involved.
Request for Qualification (RFQ) and Request for Proposal (RFP) Development: Tribe Advisory prepared the RFQ and reviewed submissions to ensure compliance and competitiveness from consortiums comprised of sponsors, EPC contractors and O&M contractors.
Pre-Qualification and Contractor Selection: Tribe Advisory developed comprehensive pre-qualification documents and facilitated the selection process for EPC contractors. These efforts led to the successful prequalification of contractors and developers, ensuring a pool of capable and experienced participants for the project.
James Cook, CEO, Tribe Advisory
“Our role in the DSST project highlights Tribe Advisory’s expertise in navigating complex financial and operational frameworks for large-scale infrastructure projects. By providing end-to-end advisory services, we have ensured that the project remains aligned with long-term sustainability goals while attracting significant global and regional investment interest.”
Peter McCreanor, CEO, Tribe Group “The Dubai Strategic Sewerage Tunnels project is a transformative initiative that embodies Dubai’s vision for sustainable urban development. As the lead advisor, Tribe is honoured to support Dubai Municipality in delivering innovative infrastructure solutions that set a benchmark for global best practices.”
Summary
The DSST aligns with Dubai’s long-term urban and sustainability goals, enhancing operational efficiency, reducing carbon emissions, and supporting population growth. The project is a PPP initiative with international consortiums managing operations under 25-35-year agreements.
About Tribe
Tribe Infrastructure Group is focused on realising national ambitions through innovative financing and development of critical infrastructure.
Headquartered at the Abu Dhabi and with offices in London, Riyadh, Manila and Sydney, Tribe operates as an independent and agile partner, strongly grounded in responsible value creation.
Tribe Advisory is the proprietary financial services arm of Tribe infrastructure Group. Tribe Advisory holds a category 4 licence and is supervised and regulated by the Financial Services Regulatory Authority at the Abu Dhabi Global Market.
We are pleased to announce the opening of our new London office at Bridge House, 181 Queen Victoria Street. This location will serve as a central hub for our advisory services, offering clients streamlined access to our expertise in infrastructure structuring and project financing. Situated in one of the world’s foremost financial and business centres, the London office positions Tribe to better support our stakeholders by leveraging an expanded talent pool and deeper connections within the global infrastructure market. The office will be led by our Executive Director, Chris Patt.
The Amiral Project, located in Jubail, Saudi Arabia, is a state-of-the-art petrochemical complex being developed and operated by the SATORP joint venture, owned by Saudi Aramco (62.5%) and TotalEnergies (37.5%). The integrated SATORP refinery is a core $11 billion project underscoring Saudi Arabia’s commitment to innovation in energy development.
Abu Dhabi National Energy Company PJSC (TAQA), together with JERA Co., Inc (JERA), will be developing, owning, financing and operating a new industrial steam (452 tonnes per hour (TPH)) and electricity (475MW) cogeneration plant that will produce electricity and steam for the Amiral petrochemical complex located in Jubail in the Eastern Province of the Kingdom.
Tribe Infrastructure Group (Tribe)served as the sole financial advisor to the consortium of TAQA (51%) and JERA (49%). The project is a critical component of the overall development, providing energy-efficient and reliable power and heat to support the operations of the petrochemical facility.
CHP, also known as cogeneration, is an energy-efficient system that simultaneously generates electricity and useful heat from the same energy source. By capturing and utilising the heat produced during electricity generation, CHP systems significantly enhance overall energy efficiency, supporting industrial operations with both power and thermal energy while reducing waste.
Construction of the CHP facility commenced in 2024, with commercial operations planned for 2027.
Noteworthy is the specific project-on-project structure whereby SATORP, as offtaker to the CHP project, is itself a project financed vehicle developing and operating the wider refinery activities. This has required a specific risk allocation and security package in order to enable project bankability at competitive financing terms.
Tribe’s Role
Tribe played a pivotal role in supporting the consortium’s successful financing structuring and implementation, with responsibilities spanning financing structuring, negotiation of financing agreements & terms, financial modelling, advice on bankability of project agreements, hedging structuring and implementation.
Financing Structuring
Tribe led the sourcing, structuring and negotiation of long term non-recourse debt arrangements including senior debt, working capital facility and VAT facility, through building of the bank group while optimising financing terms beneficial for the overall tariff competitiveness.
Negotiation of Financing Agreements
Tribe led the negotiation of the different Islamic finance-based project facilities with the support of the Sponsors/Lenders Legal Advisors, including execution of Istisna/Ijara senior debt, Murabaha VAT facility and developing working capital facility detailed termsheet.
Financial Modelling
Tribe developed and maintained a tailored financial model to meet tender and sponsor/procurer post-bid requirements up to financial close. This included conducting suites of sensitivity for the lenders and optimisation analyses for post bid sponsors negotiation with SATORP. Tribe also managed the financial model audit process as well as implementation of tax and accounting recommendations for other advisors.
Bankability of Project Agreements
Tribe acted as bridge between lenders and sponsors/SATORP during the negotiation of the final project agreements (power/steam offtake, EPC, O&M, wider security package) to ensure full bankability of the transaction, based on evolution of recent Aramco precedents for non-recourse project debt while adapting to the specific requirements due to the project-on-project deal structure.
Hedging
Tribe developed and implemented the USD SOFR hedging for the project, from negotiation with and alignment from MLA’s hedging participation to implementation and execution of interest rate SWAPs at financial close with market counterparties through market rate live competitive tender.
Pete McCreanor, CEO, Tribe Infrastructure Group “Our role in advising the consortium bidding for the Amiral CHP project reflects our expertise in delivering robust, tailored solutions for complex infrastructure bids. By integrating advanced financial modelling, risk-balanced advisory, and strategic project structuring, we ensured that the consortium presented a highly competitive bid aligned with Aramco’s technical and financial requirements.”
Nicolas Jarrosson, Director, Tribe Infrastructure Group “Tribe’s involvement in the Amiral CHP bid underscores our ability to navigate intricate financial and technical landscapes, providing the consortium with a comprehensive financing solution for success. From optimising financial financing strategies to delivering execution of financing agreements and hedging implementation, we worked closely with all stakeholders to meet the stringent requirements of a project that is integral to Saudi Arabia’s energy transition and industrial growth under Vision 2030.”
Summary
By delivering advanced full-fledged financial advisory services, Tribe ensured a competitive and bankable successful financial closing. This reflects Tribe’s expertise in enabling innovative, sustainable energy solutions for complex infrastructure projects.
About Tribe
Tribe Infrastructure Group is focused on realising national ambitions through innovative financing and development of critical infrastructure.
Headquartered at the Abu Dhabi and with offices in London, Riyadh, Manila and Sydney, Tribe operates as an independent and agile partner, strongly grounded in responsible value creation.
Tribe Advisory is the proprietary financial services arm of Tribe infrastructure Group. Tribe Advisory holds a category 4 licence and is supervised and regulated by the Financial Services Regulatory Authority at the Abu Dhabi Global Market.
Located near the Al Dhafra landfill, the $600 million facility will process 900,000 tonnes of municipal solid waste annually, generating 80 MW of electricity—enough to power 52,500 households. By reducing carbon emissions by 1.1 million tonnes annually (equivalent to removing 240,000 cars from the road), the project significantly contributes to the UAE’s goal of diverting 75% of waste from landfills.
The facility will be developed, financed, constructed, operated, and maintained by a consortium comprising Japan’s Marubeni Corporation, Switzerland’s Hitachi Zosen Inova (HZI), the Japan Overseas Infrastructure Investment Corporation (JOIN) and Tadweer.
Construction is expected to take three years, with commercial operations commencing in 2027 under a 30-year concession agreement.
Tribe Advisory’s Role
Tribe Advisory served as the lead and financial advisor to EWEC and Tadweer, guiding the project from inception to financial close over three years. As the first WtE project procured under the EWEC model and the first of its kind in Abu Dhabi, the facility represents a significant milestone in the region’s sustainability efforts.
Tribe’s role encompassed the entire project lifecycle, including business case development, stakeholder alignment, regulatory navigation, project structuring and financial feasibility, tender development and implementation. This marks Tribe’s third successful WtE transaction in the GCC, following on from Dubai and Sharjah, further solidifying its position as a leader in the sector.
Key contributions included:
Business Case Development and Approvals:
Developed the initial business case and secured government approvals to advance the project.
Procurement Management:
Directed the procurement process using the principles of Abu Dhabi’s Law No. 2 of 1998 (IPP Law), successfully adapting it for the WtE sector.
In partnership with Ashurst, acting as legal advisor to the procurer, Tribe developed a bespoke ‘first of a kind’ contracting structure, whereby Tadweer and EWEC act as joint procurer, both entering into the Concession Agreement (on a joint and several basis) with the Project Company
Managed the tendering process, including engagement with Developers and Investors.
Stakeholder Coordination:
Facilitated collaboration between EWEC, Tadweer, Transco, EAD, ADEO, Department of Finance and numerous bidding consortium, ensuring alignment with Abu Dhabi’s sustainability objectives.
Award and Financial Close:
Oversaw the bid assessment and award process, culminating in a successful financial close in July 2024.
Secured investment for the project through a joint venture comprising Marubeni, HZI, and JOIN, with Tadweer holding a 60% government stake.
James Cook, CEO, Tribe Advisory “The Abu Dhabi Waste-to-Energy project showcases Tribe’s expertise in guiding complex infrastructure initiatives to success. Through our focused advisory approach, we have ensured a seamless alignment of financial, technical, and environmental objectives.”
Pete McCreanor, CEO, Tribe Group “This groundbreaking project reflects the power of strategic collaboration and innovation. Tribe is honored to have played a key role in delivering a solution that addresses Abu Dhabi’s waste management and clean energy goals while setting a benchmark for future WtE projects.”
Summary
The Abu Dhabi Waste-to-Energy facility marks a significant milestone in the UAE’s journey toward sustainability. By transitioning from landfills to incineration using advanced moving grate technology, the project aligns with the UAE’s goal of diverting 75% of waste from landfills. The facility will not only contribute to Abu Dhabi’s sustainability efforts but also serve as a model for future WtE initiatives in the GCC region.
About Tribe
Tribe Infrastructure Group (Tribe) is focused on realising national ambitions through innovative financing and development of critical infrastructure.
Headquartered at the Abu Dhabi and with offices in London, Riyadh, Manila and Sydney, Tribe operates as an independent and agile partner, strongly grounded in responsible value creation.
Tribe Advisory is the proprietary financial services arm of Tribe Infrastructure Group. Tribe Advisory holds a category 4 licence and is supervised and regulated by the Financial Services Regulatory Authority at the Abu Dhabi Global Market.
