Bahrain is in need of long-term capital to finance the Gulf country’s growing infrastructure needs, said Kamal bin Ahmed, Minister of Transportation and acting chief executive, Bahrain Economic Development Board.

Speaking at Euromoney’s GCC financial forum in Bahrain on 4 March, he told delegates that traditionally funding for infrastructure would be provided by the government and bank loans, but due to tightening banking regulations such as Basel III, banks are more reluctant to lend.

He said the need for “alternative sources of capital in Bahrain are growing” and added that the capital markets, including Islamic finance bonds, will play an important role.

He cited the use of private-public partnership financing models as a way of funding Bahrain’s infrastructure needs, referring to Bahrain’s debut PPP deal signed in 2013 to finance much-needed housing schemes. The $450m project reached financial close toward the end of 2013 and involves the construction of more than 2,800 social and affordable housing units in Al-Madina al Shamaliya and Al-Luwzi.

Bin Ahmed added that Bahrain is also planning to expand its financial sector aiming to double its financial services industry by 2030.