Abu Dhabi broadens private infrastructure funding

Abu Dhabi’s AED55 billion public-private partnership programme is set to redraw the emirate’s infrastructure funding model by bringing private capital deeper into transport, water, flood protection, education, healthcare and community assets over the next two years.

The pipeline, launched on May 11 by the Abu Dhabi Investment Office and the Abu Dhabi Projects and Infrastructure Centre, covers 24 projects scheduled to be brought to market during 2026 and 2027. S&P Global Ratings said the plan marks a shift in the emirate’s established approach to infrastructure financing, broadening investor participation while transferring more project delivery risk to private partners.

The programme’s immediate significance lies not only in its size, but in the way it alters Abu Dhabi’s capital allocation strategy. Rather than relying mainly on direct public funding, the emirate is moving towards structured partnerships that allow sovereign resources to be preserved for other priorities, including economic diversification, energy infrastructure and resilience-linked investment.

Transport will account for the largest part of the pipeline, with 11 road and connectivity projects valued at about AED35 billion. These schemes cover more than 300 kilometres of new and upgraded roads, tunnels, intersections and corridor improvements. Officials have also indicated that road projects and education assets are among the first packages moving through advanced structuring, with an initial batch valued at around AED7 billion.

A further AED11 billion has been earmarked for five infrastructure projects covering dams, water storage, flood control systems, stormwater upgrades and urban landscaping. Eight social infrastructure projects, worth about AED9 billion, will include sports facilities, specialist healthcare assets, schools and university campuses, linking the PPP programme to the emirate’s long-term liveability and population growth agenda.

The latest assessment said Abu Dhabi’s objective is not simply to raise funding, but to widen the investor base behind infrastructure delivery. That approach reflects a broader shift across the Gulf, where governments are seeking to combine public balance sheets with institutional capital, sovereign investment platforms and specialist infrastructure operators to deliver large development pipelines without placing all construction, operational and financing risks on the state.

For Abu Dhabi, the move is strategic rather than defensive. The emirate retains one of the strongest sovereign positions globally, with S&P reaffirming its AA/A-1+ rating and stable outlook earlier this year. Its large government asset base, modest debt metrics and record of supporting strategic assets give it ample fiscal flexibility. The PPP push therefore signals a deliberate attempt to improve capital efficiency, sharpen procurement discipline and attract long-term investors into bankable projects.

The programme also comes as Abu Dhabi expands other infrastructure investment channels. A planned $30 billion platform involving L’IMAD, ADNOC, BlackRock’s Global Infrastructure Partners and Temasek is aimed at energy, transport, logistics, digital infrastructure, water and waste management assets across the Gulf, Central Asia and selected regional markets. Together, these initiatives show Abu Dhabi attempting to position itself as both a sponsor of domestic infrastructure and a regional hub for private infrastructure capital.

Risk transfer will be central to the programme’s credibility. Under PPP structures, private partners may assume defined responsibilities for design, construction, financing, operations and maintenance, while payments are often linked to performance over the life of the asset. If structured carefully, this can reduce cost overruns, improve delivery discipline and align contractors’ incentives with public-service outcomes.

The challenge will be scale. Abu Dhabi has already delivered around AED2.4 billion in PPP projects and has another AED25 billion in transactions launched in 2025 under structuring or procurement. Moving from that base to an AED55 billion pipeline across a wider range of sectors will test procurement capacity, contract design, risk allocation and investor confidence.

The emirate’s economic backdrop strengthens the case for the programme. Abu Dhabi’s real GDP reached AED325.7 billion in the third quarter of 2025, its highest quarterly value on record, while non-oil activity accounted for 54 per cent of total output. Over the first nine months of 2025, real GDP grew 5 per cent year on year, with the non-oil economy expanding 6.8 per cent.