More than 120 project-financed schemes worth over $110 billion are either being planned or under construction in the GCC as governments increasingly seek alternative methods of financing their project plans in light of falling oil revenues, said a report.  

The largest market for public projects backed with private sector finance is Kuwait, with just under $49 billion worth of projects under its public-private-partnership (PPP) projects programme, stated regional projects tracking service, Meed Projects in its report released ahead of a key industry event.  

The 'Meed Financing Projects in New Oil Era' conference will be held on March 23 at the Conrad Hilton Hotel in Dubai.

The conference will help project sponsors to manage deficits and secure private finance, contractors deal with project slowdown, contractor finance and cash flow issues and help investors and financiers to capitalise on the new borrowing needs of the region’s project owners.

Industry experts will discuss the alternative methods of financing public projects at the upcoming event.

According to Meed, Kuwait has been an innovator in advancing the PPP model in the region, with schemes ranging from power plants and water and wastewater facilities to schools and tourism projects falling under the programme, which is handled by the Kuwait Public Authority of Partnership Projects (KAPP).

The other big player in privately-financed schemes is the UAE, with about $35 billion of projects planned or under way, stated the project tracker citing data.

These include Dubai Electricity and Water Authority's (Dewa) Sheikh Mohammed bin Rashid Solar Park, Road and Transport Authority's (RTA) Union Oasis real estate scheme in Dubai and Fewa’s Umm Al-Quwain independent water project (IWP) it stated.

The other GCC states have some $26 billion worth of privately-financed projects between them, including the Facility D independent water and power project (IWPP) in Qatar, Riyadh’s King Khalid International Airport Expansion Terminal 5, and Oman’s Sohar IWP.

“The project finance model has been applied to power and water projects regularly over the past 15 years in the region, but it is only now with lower oil revenues that there is a concerted push to apply the model to projects in other sectors,” explained Ed James, the director of Content & Analysis at Meed Projects.

“Governments are increasingly turning to innovative financing structures such as project bonds, sukuk issuances, and export credit agency financing to fund projects as revenues decline. By doing so, they can maintain spending on projects without impacting their balance sheets, a critical issue when state budgets are under strain from falling oil sales,” he said.

As the oil price fell in 2015, the value of project-financed schemes increased substantially to $14.3 billion compared with just $2.6 billion the previous year, according to Meed.

With the oil price showing little sign of rising in the short term, this number is expected to continue growing in 2016, it added.-TradeArabia News Service