Ziad Awad says that tightening budgets and fiscal deficits mean countries are looking at alternative financing methods
Tightening budgets and fiscal deficits in the GCC region will see an increase in appetite for the use of alternative financing methods – including public–private partnerships (PPP) – for the development of important projects, the regional head of SNC-Lavalin has said.
Speaking in an exclusive interview with Big Project ME, Ziad Awad, regional head for the Middle East and Africa, said that with budgets being squeezed across the region, SNC-Lavalin was in a good position to capitalise on its experience with PPP and similar financing models and offer its clients ways to fund their vital infrastructure projects.
“We see more will on the clients’ side, to work with the private sector in these critical times. Budgets are being squeezed because most GCC countries are operating at fiscal deficit. Basically, there is less revenue coming in and they need help to fund some of them,” he explained.
“We’re seeing more and more need to help our customers, and in that sense, SNC-Lavalin is in a great position to do that. We have really good experience in Canada, working on P3 solutions and similar financing models.
“So hopefully, our international P3 knowledge – and our local know-how and experience – can ensure that these styles of financing models are structured in such a way that suits the local environment. Every country has different needs, so it’s very important to have an overall view and that you structure something that’s suitable for a particular customer or country,” he said.
Having already worked in PPP projects in Algeria, Awad expressed confidence in the contractor’s ability to provide adequate solutions to the market in the GCC, but also cautioned that alternative funding of projects was still in its infancy in the region.
“There’s still a lot of work that needs to be done in terms of regulation, in terms of being able to choose the right project and in terms of really understanding the model and the importance of having the right risk allocation across the different stakeholders. At the end of the day, this is one collaborative effort, rather than simply just passing the risk from one side to the other.”
To this end, Awad said that SNC-Lavalin’s financial and investment arm would be looking to step into the GCC’s PPP marketplace, while also supporting the contractor’s other four business units in the oil and gas, infrastructure, mining and metals fields.
“SNC-Lavalin has an arm that is specialised in investment and financing. Basically, this arm supports all the other business units and our customers, in terms of looking at projects and being a part of some of them – ones that are considered for P3 financing.
“We’re really talking about end-to-end solutions, where we can work across the value chain and across all sectors. Whether the circumstances require a single, specific job in one of the sectors, or whether they require an integrated approach or an end-to-end solution, I think SNC-Lavalin is in a good position to offer that,” he concluded.