After a difficult 2009, in which the value of project finance deals plummeted to $20bn from more than double that figure in 2008, project sponsors and financiers are more optimistic about the prospects for project finance in 2010. This optimism springs from the list of large projects expected to reach financial close in the coming months.

Liquidity issues arising from the global financial crisis may have affected the lending power of some major banks in the region, but the infrastructure needs of Gulf states have not gone away.

For infrastructure finance, the message from lenders is loud and clear. Well-structured projects, with long-term planning and strong sponsors, will secure finance.

To their credit, Gulf clients and developers appear to be listening and are adapting their strategies by launching PPPs and borrowing against fixed assets.

In the long term, this change in financing strategy may mean that some clients end up paying more for their projects, but getting the Gulf’s roads and railways built quickly will bring economic benefits that far outweigh the project cost.