July 24, 2009

The regional project finance market has been mauled by the credit crunch resulting in a raft of cancelled deals - but it has recently shown a glimmer of life.In June, Qatar's Nakilat raised $949 million (Dh3.48 billion) to pay for liquefied natural gas ships. Financing deals for three large projects - $1.7 billion for Bahrain's Addur power and water project and two multi-billion dollar deals in Abu Dhabi - are expected to close shortly.

It is still a far cry from the happy days of only last year, when major deals became routine and banks jostled for business, bringing prices down. Senior bankers say the project lending market is still shell-shocked from the turmoil of last autumn."It is very difficult for banks to lend significant sums to long-term projects, at any price," says Rajiv Shukla, managing director and head of debt capital markets at HSBC Middle East.