Gulf banks in infrastructure-lending drive
Commercial Bank of Qatar’s $620m financing of two road projects points to increasing appetite among regional lenders, say experts
Gulf banks are showing increasing appetite for lending on infrastructure projects, experts say, in the wake of a Doha-based bank’s $620 million financing of two road projects in Qatar.
Commercial Bank of Qatar (CBQ) led a financing arrangement of $274 million for a joint venture led by Joannou & Paraskevaides (Overseas) for the $458 million West Corridor, part of the East-West Corridor Expressway connecting Qatar’s Industrial Area to the Hamad International Airport.
The second deal, for the $942 million Al Rayyan Road Project, involved financing worth $346 million, and was executed by Al Khalij Commercial Bank and CBQ as joint mandate lead arrangers.
Regional banks are playing greater role in financing of infrastructure projects in the GCC, and are now on par with their international counterparts, experts say.
“I have seen tremendous growth in the maturity of the local banking institutions,” says Stefano Terranova, the regional head of acquisitions, investments and financial advisory at the energy firm GDF Suez.
“The participation of international banks, Export Credit Agencies (ECA) and multilaterals in local markets have helped the growth of the local banking market.”
CBQ says it is focusing on corporate lending opportunities around infrastructure in the Gulf state, which will host the 2022 FIFA World Cup.
Commercial Bank CEO Abdulla Saleh Al Raisi says: “CBQ has been a strong advocate of contract financing to fund Qatar’s huge infrastructure investment as part of supporting robust Qatari economy due to a combination of strong market demand and achieving [the] Qatar 2030 vision.”
Other examples of local banks’ infrastructure deals include the $500 million of senior debt committed by UAE domestic banks for the Mirfa Independent Water and Power Project (Mirfa IWPP). The banks involved were First Gulf Bank, National Bank of Abu Dhabi, Union National Bank and Abu Dhabi Commercial Bank.
