Developers looking for alternative funding sources, analysts say
A Price Waterhouse report has said that investment in Middle Eastern projects is projected to increase next year.
Titled ‘Delivering the Middle East’s Mega Projects’, the report has stated that as many as 66% of respondents in the Middle East region reported spending over $100mn on major projects in 2012 across a broad range of industry sectors.
Furthermore 72% of the respondents expect to increase their spending in 2013, according to the survey. The report also sheds light on project financing issues, including funding constraints, perception of private financing and the funding outlook for 2013.
Despite regular project reporting and structured review regimes, the number of participating respondents experiencing performance issues relating to their capital projects was high. 80% of respondents said that their projects had experienced a delay, with 46% saying that they had suffered delays in excess of six months.
Charles Lloyd, partner and leader of Capital Project & Infrastructure practice at PwC in the Middle East, said: “An issue facing projects in the Middle East is the availability of funding for major projects. Difficulties in the eurozone financial markets have reduced the availability of traditional project finance funding sources and led many sponsors to explore alternative funding sources.”