Gulf countries massive round of infrastructure spending in order to boost their economies underpins the revival of regional market for project finance, banks in the region forecast. The Middle East countries are poised to invest between $150 billion to $200 billion in new infrastructure projects over the coming decade, Christophe Mariot, regional head of structured finance at French lender BNP Paribas, said. "Governments here realized that more investments needed to be done on public infrastructure and utilities," said Jonathan Robinson, managing director and head of Middle East project finance for HSBC in Dubai. "We're seeing new power plants, wastewater treatment systems, new oil and gas projects and many more greenfield projects driven by the people's long-term needs," Robinson said. Last week, HSBC joined the local bank Emirates NBD to provide a $200 million debt facility for companies interested in constructing a new power plant for the state-owned Dubai Electricity and Water Authority. Qatar Petroleum's $10 billion Barzan natural-gas project, a venture with Exxon Mobil Corp, has been in the market for financing since last week. Many Gulf states have plans to extend their road, airport and port facilities, and Saudi Arabia's council of ministers earlier this month gave the go-ahead to implement a $25 billion project which aims to link the six GCC countries through a 2,117km railway network. "Regional banks are becoming more active in project finance given the size and volume of projects in the region, as evidenced by an increased appetite for longer-term facilities," said Mark Saab, managing director of investment banking at Emirates NBD, the largest bank by assets in the region. "Regional banks' appetite depends on the type and scope of each project, with blue-chip clients and landmark projects attracting bank funding more easily," he added. The volume of Middle East project finance transactions has fallen sharply since the global financial crisis in 2008, and has plunged again this year as the Arab spring has halted or curtailed new investment in countries such as Egypt, Tunisia and Libya. Figures from data provider Dealogic show the total of project finance transactions in the Middle East more than halved to $13.3b billion in the first nine months of 2011, from $29.5 billion in the equivalent period of 2010.
