Gulf project market to cross 1.5t

The project market in the Gulf region is now estimated in excess of $1.8 trillion, and while the project-finance market remains buoyant, it is still relatively immature and, as such, subject to the vagaries of current global market fluctuations, according to MEED Projects.

Edmund O'Sullivan, chairman, MEED Events, in his opening remarks at its 10th annual project-finance conference, said: "We saw from our research for our Islamic finance report last year just how influential Islamic project finance has become.

"The value of deals being closed looks set to reach $30 billion million in five years time and could represent up to a third of major structured deals in the region.

When you add to this rising opportunities afforded from more traditional international sources of project finance, the attraction of the region in business terms is quite understandable.

"What has been driving project-finance growth is the economic boom in the GCC, brought about by strong oil prices which has fuelled unprecedented liquidity in the regional banking market. However, while wider international project-financing sources exist, the global impact of the economic downturn now being felt means we are entering a period of real change and uncertainty.

"What happens in the next few months, and the patterns we will start to see emerging, will, I believe, determine the mid- to long-term future of project financing in the region." The two-day conference is believed to be a right forum aimed at investigating the impact of the credit crunch on major Gulf industries.

The event was attended by the key decision makers, government officials and leading industry figures. With the global credit crunch and the possibilities of a global recession hitting the headlines, this year looks likely to be a critical one for project financing in the Gulf.

Providing timely insight into the long-term health of the sector - from perspectives of both lenders and borrowers - is MEED's Project Finance conference. The two-day event, under the patronage of Shaikh Ahmed bin Mohammed Al Khalifa, Minister of Finance, taking place at the Ritz-Carlton, Bahrain, Hotel and Spa, concludes today.

During the past decade the region has seen the project-finance market develop from what was practically a standing start to become one of the most important sectors in its economic growth and development.

The event addresses these issues head on, sharing insight from some of the region's most respected figures from finance, government and industry including Fahad Al-Raqbani, senior manager, project and corporate finance at Mubadala; Dr. Amer Al-Swaha, head of IPP programme at Saudi Electric Company, and Ali Sheikh, head of project-finance advisory at NBD Investment Bank, as well as an opening address from event patron, the Minister of Finance.

Another area of focus for this year's Project Finance has been the significant impact of Islamic project financing on the region's financial and construction sectors. A special pre-conference workshop, led by Norton Rose, was dedicated to this area, and several speakers, including keynote speaker Fahad Al Raqbani, touched on the growing influence of Islamic finance on their business and organisational activities