Gulf's project financing in the spotlight

MANAMA: 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 a timely insight into the long-term health of the sector - from the perspectives of both lenders and borrowers - is MEED's Project Finance 2008 conference.

The event, which is being held under the patronage of Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa, takes place at the Ritz-Carlton Bahrain, Hotel and Spa on February 26 and 27.

The MEED Project Finance conference is now in its 10th successful year. During this time, 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 project market in the Gulf region is now estimated in excess of $1.8 trillion, according to MEED Projects, and whilst the project finance market remains buoyant, it is still relatively immature and, as such, subject to the vagaries of current global market fluctuations.

One key area of focus for this year's event is the significant impact of Islamic project financing on the region's financial and construction sectors.

"We saw from our research for MEED's Islamic Finance report last year just how influential Islamic project finance has become," said MEED events chairman Edmund O'Sullivan.

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

"What's 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.

The gold sponsor for Project Finance 2008 is NBD Investment Bank, with leading merchant bank, GIB and Bayern LB the silver sponsors.