IslamicFinance.de

Banks still have an appetite for project finance but are being more selective in lending as the project pipeline in the Arabian Gulf region stabilises. Project awards in the Gulf region this year are forecast to rise slightly to US$172.7 billion from $171.7bn last year. In the first quarter of this year $46.6bn worth of projects were awarded versus $53.7bn in the first quarter of last year – a figure skewed by the $15bn worth of contracts for Kuwait’s clean fuels refinery project last year. One reason banks are eager to finance good projects is the vast liquidity they amassed during the years of strong oil prices. Gulf governments have also pledged to continue spending on infrastructure, a sign that encourages banks to continue to lend.