January 26, 2018 / 12:38 PM / 8 months ago

Mideast slump drags on project finance

LONDON, Jan 26 (IFR) - Loans for project finance fell 14% to US$230bn last year as activity in the Middle East fell by three-quarters from 2016, according to data from Thomson Reuters.

There were 791 project finance loans globally last year, slightly down from 809 in 2016.

Japan’s Mitsubishi UFJ Financial Group kept its top spot as leading mandated arranger after working on 130 deals with proceeds of US$12.2bn, the data show. That gave it a 5.3% market share, down from 5.7% in 2016.

State Bank of India jumped to second from 10th in 2016 after bringing in proceeds of US$10.4bn from a modest 22 deals. The Indian bank pipped MUFG to be the leading bookrunner on deals.

Sumitomo Mitsui Financial Group stayed in third for mandated arrangers and BNP Paribas moved to fourth from ninth. China Development Bank slipped to fifth from second in 2016 as its market share fell to 2.9% from 4.9%.

Deals in the Europe, Middle East and Africa region fell 44% from 2016 to US$84.8bn, as proceeds from loans in the Middle East tumbled to US$11.7bn, down 75% from US$46.5bn. There was a 74% fall in eastern Europe to US$6.5bn and a 22% drop in western Europe to US$51.5bn (see chart).

Loans in the Americas rose 16% on the year to US$64.4bn and in Asia-Pacific there was a 35% increase to US$80.4bn.

The power sector dominated project finance activity, accounting for US$122.8bn of deals, or 54% of the market. There were 546 deals in the sector.

Transportation accounted for 19% of overall deals, and oil and gas accounted for 16%, including Eni’s US$4.9bn package for its Coral South LNG project in Mozambique, the biggest project finance loan deal of the year. (This story will appear in the January 27 issue of IFR Magazine; Reporting by Steve Slater)

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