There are currently more than 120 project-financed schemes worth more than $110 billion either planned or under construction in the GCC as governments increasingly seek alternative methods of financing their project plans in light of falling oil revenues. 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. With the oil price showing little sign of rising in the short term, this number is expected to continue growing in 2016. According to data from regional projects tracking service, MEED Projects, the largest market for public projects backed with private sector finance in the Gulf region is Kuwait, which boasts schemes valued at just under $49 billion ranging from power plants and water and wastewater facilities to schools and tourism projects falling under the public-private-partnership (PPP) projects program. The UAE is also a major player in privately-financed schemes, with about $35 billion of projects planned or under way. These include Dewa's Sheikh Mohammed bin Rashid Solar Park, the RTA's Union Oasis real estate scheme, and Fewa's Umm Al-Quwain independent water project (IWP). The four 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. Alternative methods of financing public projects will be discussed and explored at the forthcoming MEED Financing Projects in New Oil Era conference taking place on March 23 at the Conrad Hilton Hotel in Dubai. A session on The Reality of Capital Availability in 2016 and Beyond will explore how companies will need to expand sources of finance as well as investment opportunities for infrastructure fund options in a low-price environment. "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," said Ed James, 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." Geopolitical & economic outlook for MENA countries will also be discussed, focusing on US shale oil production and its impact on the region's oil markets, as well as future prospects of project financing and progress in the GCC. MEED Financing Projects in New Oil Era is aimed at helping project sponsors to manage deficits and secure private finance, as well as assisting contractors deal with project slow down, contractor finance and cash flow issues while aiding investors and financiers to capitalize on the new borrowing needs of the region's project owners.
