State-owned Abu Dhabi National Oil Co. and Abu Dhabi National Energy Co. (also known as TAQA) on Friday announced the financial close of a $3.8 billion sub-sea transmission project that will help decarbonize the energy producer's offshore operations.

First announced last year, the 3.2GW high-voltage, direct current (HVDC-VSC) transmission project will be operated by TAQA’s subsidiary Abu Dhabi Transmission and Despatch Company (TRANSCO).

The project’s commercial operation is expected to start in 2025. It is expected to reduce the carbon footprint of ADNOC’s offshore operations by more than 30%, as existing offshore gas turbine generators will be replaced with more sustainable power sources, the Abu Dhabi energy companies said in a joint statement.

The transmission project is being funded through a special purpose vehicle (SPV) jointly owned by ADNOC (30%), TAQA (30%), and a consortium of Korea Electric Power Corporation (KEPCO), Kyushu Electric Power, and Électricité de France (EDF), which will hold a combined stake of 40% in the project

Combined investment from the consortium, commercial lenders and export credit agencies yielded more than $3 billion in foreign direct investment.

The consortium will build, own, operate and transfer the state-of-the-art transmission system with the full project being returned to ADNOC after 35 years of operation. More than 50% of the value of this project will flow back into the UAE’s economy under ADNOC’s hugely successful In-Country Value (ICV) program.

(Reporting by Brinda Darasha; editing by Seban Scaria)