Signs of life in Gulf project finance recruitment

After a roller-coaster ride over the last two years, evidence of the much-anticipated growth in the Middle East project finance market has emerged in the first half of this year. International banks are beginning to recruit as a result.

The proceeds of project finance deals in the Middle East rose by 68.9% on 2009 levels, to reach around $7.4bn in the first half of this year, according to new data from Thomson Reuters.

Experts are predicting that 2010 could be a decent year for project finance in the region, with the Gulf Arab market expected to reach $30bn.

Nonetheless, a lack of liquidity in the region and dampened lending appetite among local banks has meant that many projects have been put on hold, while the focus has shifted away from real estate and more towards essentials such as power and water projects, schools and industrial sectors.

International banks, which would have typically funded the larger projects, have also become more cautious, largely because of fluctuations in government policy and subsequent cancellation or suspension of major initiatives.

But there are signs of confidence around the sector again, not least the new joint venture announced by Saudi Electricity Company and the development of the new Jubail Petrochemical Plant, both unveiled in June. This has begun to filter through to international firms' appetite for project debt, and there's a need to recruit for their teams in the region.

James Wakefield, regional director of infrastructure investment headhunters Cobalt Abu Dhabi, believes that - after a period of retraction - banks are beginning to build their project finance teams again.

"International banks were largely reluctant to cut either senior ranking or junior project finance professionals during the downturn," he says. "This meant the mid-level - AVPs and VPs - suffered when the cuts came. As a result, much of the recruitment is currently focused at this level."

Much of the hiring down the line, he believes, will come from international banks which currently run their Middle East-focused project finance teams from Western locations building their presence on the ground.