Project financing in the energy rich Gulf has halved this year as banks steer away from lending, a senior executive from HSBC said on Monday.

Syndicated loans for projects in the Gulf has totalled around $30 billion so far this year compared to $90 billion  in 2008 and $130 billion in 2007, Darren Davis managing director and head of resources and the energy group at HSBC, told reporters on the sidelines of a MEED energy conference.

'Project financing has slowed because banks have withdrawn from lending,' he said adding banks are becoming sensitive to risk.

But the energy sector continues to be attractive for lenders because of strong government support and project viability he said. Borrowing costs in the region have also gone up.

'It has doubled to what it was one and a half year ago' he said.-Reuters