Project financing is booming in Saudi Arabia, which leads the Middle East in deals, with a total of eight in 2015, worth more than $13 billion.
The figure, from Thomson Reuters, represents an increase of 193% from a year earlier, despite low oil prices that are squeezing exporting countries across the region.
The biggest project by far was Petro Rabigh’s ongoing $8.1 billion expansion of its refining and petrochemical complex on Saudi Arabia’s Red Sea coast north of Jeddah. Japan Bank for International Cooperation, Saudi Arabia’s Public Investment Fund and a group of 19 financial institutions participated in the deal. An earlier phase of the project was completed in 2008 at a cost of more than $10 billion.
Petro Rabigh was established in 2005 as a joint venture of Saudi Aramco and Sumitomo Chemical. It is now listed on the Saudi Stock Exchange.
“Our project finance advisory business is still witnessing healthy deal activity in strategic infrastructure and power projects, and we expect it to continue,” says Omar Mehanna, managing director and head of merchant banking at National Bank of Abu Dhabi.
Saudi mining company Ma’aden won second place among project financings last year, with a $3.1 billion phosphate chemical project in Umm Wu’al, near the kingdom’s northern border with Jordan.
Across the Middle East, the United Arab Emirates financed $1.2 billion of projects in 2015, followed by Oman, with $910 million, and Qatar with $860 million.