$600 bln GCC projects face funding trouble
Mar 25, 2010 at 08:27
By Rajiv Sekhri
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UAE marks $2.9 bln for infrastructure in '10
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Qatar infrastructure projects hit by delay
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$40 bln of Gulf port projects at risk
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$1 tln of Gulf real estate projects at risk
DUBAI - Infrastructure projects in the Gulf worth up to $600 billion could hit a road block due to a lack of financing, Henry Azzam, Deutsche Bank chief executive for Middle East and North Africa (MENA) said on Wednesday.
"The funding of these projects might not be easy if developers do not find loans," he said at a Union of Arab Banks forum, where bankers from the region raised concerns about the hesitancy of banks in the region to lend as the financial crisis continues.
Azzam pointed out that bank capitalisation in the GCC's two largest economies - Saudi banks at $60 billion and UAE lenders at $68 billion - would not meet funding requirements for the projects.
"This is the constraint to execute all of (these projects)," Azzam added. "We need a new source of financing. We need to develop debt and bond markets."
He added that the best way for GCC governments to combat the scarcity of bank loans was to "segment projects and phase them out over years ... And governments need to contribute a larger part of the funding".
Mar 25, 2010 at 08:27
By Rajiv Sekhri
*
UAE marks $2.9 bln for infrastructure in '10
*
Qatar infrastructure projects hit by delay
*
$40 bln of Gulf port projects at risk
*
$1 tln of Gulf real estate projects at risk
DUBAI - Infrastructure projects in the Gulf worth up to $600 billion could hit a road block due to a lack of financing, Henry Azzam, Deutsche Bank chief executive for Middle East and North Africa (MENA) said on Wednesday.
"The funding of these projects might not be easy if developers do not find loans," he said at a Union of Arab Banks forum, where bankers from the region raised concerns about the hesitancy of banks in the region to lend as the financial crisis continues.
Azzam pointed out that bank capitalisation in the GCC's two largest economies - Saudi banks at $60 billion and UAE lenders at $68 billion - would not meet funding requirements for the projects.
"This is the constraint to execute all of (these projects)," Azzam added. "We need a new source of financing. We need to develop debt and bond markets."
He added that the best way for GCC governments to combat the scarcity of bank loans was to "segment projects and phase them out over years ... And governments need to contribute a larger part of the funding".