The Gulf market for project finance could reach $30 billion in 2010 on improved liquidity and increased lending, a banker at French group BNP Paribas said on Monday.

"There is a potential for $25 billion-$30 billion of large to medium-sized projects in the pipeline. It could be more if some of the large projects are completed," Christophe Mariot, head of project finance in the Gulf at BNP Paribas, told Reuters.

He said most of that volume would be accounted for by seven or eight projects currently planned, without elaborating. "I think banks are more cautious on mainstream lending or lending to corporates."    

Gulf loan markets were hit by high profile defaults last year and profit at regional banks was burdened by provisions for bad loans.

Mariot said the market was big enough to accommodate banks, leading to little pressure on banks to bid at low prices. - Reuters