Project Finance: The question of liquidity is where to get it from

Fleming Gulf’s annual Project Finance Forum, now in its sixth year, is the focal event in the region, bringing together industry pioneers from both the public and private sector. Previous forums have hosted decision-makers from powerhouses Saudi Aramco, Qatar Petroleum, Mubadala and Ma’aden to name a few. Over the years it has received the support of reputed entities which include The World Bank’s MIGA, ICIEC and IPFA. Over the years, renowned experts have drawn up the blueprint for the future of Project Finance in the region and steered the industry to new heights.
 
Entering 2010, the world’s economies are still recovering from the Credit Crunch. Regional Project Finance has been turned upside down – in 2007 projects were awash with funding regardless of their viability, come 2009 sponsors are struggling to secure lending for their projects.
 
The majority of projects currently being financed either belongs to the Oil & Gas industry or are government supported. For the few projects successful in securing funding, the criterion has changed radically with meticulous scrutiny, high costs of borrowing and short tenors being order of the day.
 
According to a renowned regional research entity, the Middle East project finance industry relies mainly on bank assets for its funding needs, with limited funding coming from the stock market, trailed by debt securities. Post-crisis, these too are proving to be a challenging catch. Cross-border lending has ceased as most local banks choose to fund local projects; as a result, larger projects are being financed predominantly by international banks. Furthermore, the number of banks collaborating to lend to projects has also increased, bringing with it legal complexities. On the other hand, the recent volatility of the stock market has made investors cautious about their investments.
 
Islamic finance has come to the fore as an upcoming means of funding – however the nascent industry has to be nurtured in order to make it capable of providing financing solutions to large-scale projects that require long-tenors. Projects have to be structured to ensure Sharia compliance while providing risk mitigation – a thin line that has to be traversed.
 
To address industry requirements, Fleming Gulf is proud to announce the 6th Annual Project Finance Forum, which will take place in Dubai on May 25th – 26th, 2010.
 
The forum brings together the major stakeholders - industry experts, informed decision makers and government representatives – to address the unique requirements of today’s volatile business environment and direct the recovery of regional developments.
 
Based on the feedback and guidance of recognized Middle East professionals, 2010 studies the evolution of project finance in the Middle East to carry forward development of the regional Capital Structure to enhance funding sources available to local projects. In view of the same, dynamics of Islamic financial instruments utilized are examined to understand how this nascent industry can be nurtured to fulfil demand. Moreover, we examine the role of the government in promoting investment in the area by supporting the industry  and working with the private sector to ensure both business and social progress.
 
The two day conference aims to enhance the knowledge quotient from all perspectives. Driven by the proficiency of industry pioneers and experts, the 6th Annual Project Finance Forum 2010 will answer the question of liquidity facing the majority of regional projects.