Project companies in the Middle East should increasingly use the bond markets to refinance project finance loans and free up bank lending to new projects, according to speakers at the MEED Abu Dhabi Conference 2010.

At least one project company will use the bond markets in this way next year, according to Declan Hegarty, managing director and head of business for HSBC in Abu Dhabi.

“Capital markets transactions from this region are being significantly oversubscribed at the moment,” says Hegarty. “The bond market is reopen again and the next step in maturing the market is to refinance some projects in the capital markets. There will be at least one project refinanced in the capital markets in 2011.”

Mona Zein el-Din, head of financial institutions and structured finance at Union National Bank, adds, “It is time to start seeing some projects refinanced through the bond markets. Also, local banks need to play a bigger role in project finance in Abu Dhabi.”

She said that Abu Dhabi banks were well capitalised and need to do more to support new projects in the emirate.

Hegarty also said that HSBC had grown its loan book in Abu Dhabi during 2010 across all sectors.