Continued Evolution in Middle Eastern Project Finance
The evolution of project finance in the Middle East has been driven by the region’ s ambitious development goals and energy transition strategies as GCC governments are increasingly prioritising public-private partnerships( PPPs) to finance large-scale infrastructure projects.
Bracewell is involved in project financings in the Middle East for a diverse range of asset classes. In recent years the Middle East’ s project finance landscape has been significantly shaped by the liquidity and risk appetite of regional and international banks. Local and regional banks, bolstered by high oil revenues in recent years, have maintained strong liquidity levels, enabling them to play an increasingly prominent role in financing large-scale( and often“ first of a kind”) infrastructure and energy projects.
At the same time, the increasing involvement of Chinese and Asian banks in the region, alongside traditional Western lenders, underscores global interest in Middle Eastern infrastructure projects. These international banks have maintained a cautious but steady appetite for exposure to Middle Eastern projects, focusing on wellstructured deals with robust revenue streams, especially in sectors such as renewables( including notably in the recent REPDO Round 4 and Round 5 projects).
Banks are enthusiastic about financing projects in countries with strong credit ratings like the UAE and Saudi Arabia, with increased activity from Asian Export Credit Agencies( ECAs) in recent years. The availability of robust liquidity and a selective risk appetite have sparked innovation in financing structures. Islamic financing is a key tool for project sponsors looking to diversify funding while aligning with regional cultural and legal frameworks. Additionally, banks are increasingly supporting sustainable finance initiatives, offering favourable terms for projects that adhere to Environmental, Social, and Governance( ESG) principles, in line with ambitious regional strategies such as Saudi Vision 2030 and the UAE’ s Net Zero 2050.
Recent Notable Matters
• Two Saudi Arabian REPDO Round 4 wind IPPs— advising Japan Bank for International Cooperation( JBIC) and commercial lenders in relation to the project financing by the Marubeni Corporation-led consortium for both the Waad Al-Shamal 500 MW Wind IPP and Al-Ghat 600 MW Wind IPP in Saudi Arabia
• Round 5 Solar PV 3.7GW IPPs— advising Masdar-led consortium with respect to its bid for four solar PV projects under procurement by SPPC, totalling 3.7 GW of renewables capacity in Saudi Arabia
• Al Ansar Hospital PPP— advising lenders to a consortium of Tamasuk and Alghanim in relation to project financing of the development of a hospital and associated facilities. This project is the first PPP healthcare project in Saudi Arabia.
• Juranah Independent Strategic Water Reservoir Project— advising the Vision International Investment Company, TAQA and GIC consortium in relation to its project financing of Saudi Arabia’ s first strategic water reservoir concession( servicing Mecca)
• Taweelah C 2.6GW IPP— Advising JERA and Etihad WE with respect to its bid for this 2.6 GW conventional gas fired IPP
• Saadiyat Island RO( formerly tendered as a two-plant deal named Abu Dhabi Islands)— advising Acciona Agua as a bidder in relation to EWEC’ s third IWP
• Barka 2 IPP and Barka 1 IWP— representing the lenders with respect to the term extension, refinancing and restructuring of Barka 2 IPP and Barka 2 IWP projects in Oman
The Year Ahead
As the region continues to diversify its funding sources and explore innovative financial tools, the Middle East project finance market will remain a key driver of its economic transformation. bracewell. com