Qatar to spend up to $205bn on infrastructure
Manama, February 5, 2014
Qatar plans to spend as much as $205 billion on infrastructure between 2013 and 2018, the acting head of project finance at the state's largest lender said, as the country invests its vast hydrocarbon wealth in a development boom.
The Gulf state is spending billions of dollars in areas such as transport, electricity and water generation and housing, in an effort to improve its economy and build towards its hosting of the 2022 soccer World Cup.
The government has been ramping up its own spending as part of this push. The budget for fiscal 2013/4 is up 17.9 percent to 210.6 billion riyals ($57.8 billion), thanks to wealth accrued as the world's largest exporter of liquefied natural gas.
Much of the planned infrastructure spending will be financed by the government level. But significant funding still needs to come from both local and international lenders, said Yusuf Saeed, acting head of global structured finance at Qatar National Bank.
"For large projects, what we're seeing is you have conventional financing and Islamic financing and options for export credit agencies," Saeed told an infrastructure finance conference in the capital of neighbouring Bahrain, when he was asked about funding for a pair of petrochemical plants that will cost around $13.5 billion.
Requests for banks to help finance the first of these - the $6.4 billion Al Karaana scheme, a joint venture between Qatar Petroleum and Royal Dutch Shell - are due to be sent out by the end of the first quarter, Saeed said.
Another significant contributor to the total figure is the Qatar Rail project, which is expected to cost around $45 billion to build, Saeed said. The contract for rolling stock alone should be worth between $5 billion to $10 billion.
Contracts to build the first phase, worth $8.2 billion, were awarded in June to companies including South Korea's Samsung C&T Corp and France's Vinci. The metro is due for completion in 2019.
Other notable projects include the 2400-megawatt Facility D independent water and power project - expected to cost upwards of $3 billion - and the Sharq road system, with a price tag of around $12 billion, Saeed said.
The latter project will link Doha's new Hamad International airport with the city's cultural district of Katara and the central business area of West Bay. It will be fully paid for by the government, the president of Qatar's Public Works Authority told Reuters in December. - Reuters