UAE Law and Practice Contributed by: Arsalan Tariq, Nil Acar and Ahmed Kamran, BSA LAW
7.5 Risk Areas for Lenders Even though the UAE’s new Bankruptcy Law (Federal Decree Law No 51 of 2023) provides a streamlined restructuring framework, lenders still face notewor- thy risks if a borrower, security provider or guarantor becomes insolvent. Suspension of Claims (Moratorium Periods) A moratorium automatically takes effect upon admis- sion to Preventive Settlement (initially three months, extendable to six) during which lenders, including secured creditors, are prevented from enforcement actions unless the court permits otherwise. Trustee Authority and Asset Disposal Timeframes While earlier law imposed a one-month deadline for sale of secured assets, the new law emphasises speed and judicial supervision but does not specify identical timeframes, raising uncertainty for lenders Under the new UAE Bankruptcy Law, lenders seeking to initiate insolvency proceedings against a defaulting borrower should be aware of a key procedural change – a mandatory initial deposit equal to 5% of the debt- or’s total debts or assets is now required at the time of filing. This requirement, set out in Article 25 and implemented through Cabinet Resolution No 94 of 2024 (Executive Regulations), introduces a significant upfront cost for creditor-initiated applications. While courts may waive or reduce the deposit in cases of demonstrated hardship, this procedural hurdle adds a new layer of financial and strategic consideration for lenders contemplating enforcement through bank- ruptcy proceedings. expecting quick recovery. Initial Deposit Requirement
lenders, multilateral institutions, and export credit agencies participating in large-scale financings. The energy and power sector, particularly renewable energy, remains the most active, with large-scale IPP and PPP projects tendered by DEWA, EWEC and SEWA. Flagship projects include the 2 GW Al Dhafra Solar IPP, the Hassyan clean coal-to-gas plant, and green hydrogen pilot ventures. In water and wastewa- ter, desalination and sewage treatment projects (such as Taweelah IWP and Jebel Ali STP) are increasingly structured under PPP models. Transport and infrastructure projects, including Etihad Rail, Dubai Metro expansion, and major port develop- ments, continue to attract syndicated bank financing and ECA support. In the oil, gas and petrochemi- cal sectors, ADNOC has led innovative transactions through pipeline monetisation and joint ventures, often with limited recourse financing structures. Meanwhile, industrial and logistics projects within zones like KIZAD, JAFZA and Dubai Industrial City draw capital from regional banks and DFIs, often involving Islamic financing tools and structured leasing. 8.2 Public-Private Partnership Transactions PPPs are a key component of the UAE’s infrastruc- ture strategy, especially in capital-intensive sectors such as energy, water, healthcare, transport and waste management. While there is no single unified PPP law at the federal level for all Emirates, the Federal Law No 12 of 2023 on Public-Private Partnerships now governs federal- level PPP projects, providing a dedicated legal frame- work for partnerships between private entities and federal ministries or authorities. The law establishes the Ministry of Finance as the main regulatory body for federal PPPs and outlines key provisions related to risk allocation, procurement procedures and private sector engagement. At the Emirate level, Abu Dhabi’s PPP regime is gov- erned by Law No 2 of 2019 and implemented by the Abu Dhabi Investment Office (ADIO), which acts as the central granting and supervising authority for PPP pro- jects within the Emirate. ADIO maintains a transparent
8. Project Finance 8.1 Recent Project Finance Activity
The United Arab Emirates (UAE) continues to wit- ness a strong level of project finance activity, driven by ambitious government-led infrastructure develop- ment, energy transition goals, and regional economic diversification strategies. The project finance market remains active across both onshore and free zone jurisdictions, with a mix of domestic and international
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