Project Finance Beats the Crunch, According to Thomson Reuters Survey

    LONDON, July 8 /CNW/ - Project finance lending activity in the first half
of 2008 rose 18% over the same period last year - driven by strong growth in
the oil & gas and mining sectors.
    The figures are released in the Thomson Reuters project finance survey
published by Thomson Reuters Project Finance International.
    Project finance lending rose from US$112.7bn in the first half of 2007 to
US$133bn in the first half of 2008.
    The power sector accounted for US$41bn with transportation US$26.6bn. Oil
& Gas accounted for US$21.7bn followed by private finance initiative
investments US$14.2bn and the petrochemical industry, US$9.6bn.
    The US was the leading centre of activity, US$19.1bm, followed by
Australia, US$10bn, UK, US$9.9bn, India, US$9.7bn and Spain US$9.3bn.
    Project finance lending is split between loan and bond finance. The loan
markets continued to grow - up to US$127.8bn in 2008 from US$103.7bn but the
bond market dropped from US$9bn to US$5.1bn.
    The credit crunch has made its impact on the project finance market. Loan
margins have increased above 100bp over libor this year for most deals, nearly
doubling in many cases over what could have been achieved a year ago. And the
bond market has suffered with few deals transacted.
    But demand from the various industrial sectors for project finance has
been keeping volumes up. Investment in the power generation sector continued
its strong growth - across both traditional thermal and renewable energy
developments. Renewable energy accounted for US$14bn of the sector's US$41bn
with wind, US$9.4bn, and the newly emerging solar sector, US$4.6bn.
    The Oil & Gas sector showed strong growth - up from US$8.9bn in the first
half of 2007 to US$19.2bn in the first half of 2008. Mining shot up from
US$1bn in the first half of 2007 to US$9.2bn in the first half of 2008.
    Royal Bank of Scotland topped the loan league arranging table on US$9.2bn
followed by SBI Capital of India, US$6.9bn, BNP Paribas, US$6.9bn, Calyon,
US$5.5bn and SMBC, US$4.7bn.

    Project finance sectors IH 08 (IH 07 in brackets)

    Power            US$41bn      (US$37bn)
    Transportation   US$26.6bn    (US$23.1bn)
    Oil & Gas        US$21.7bn    (US$8.9bn)
    PFI              US$14.2bn    (US$19.5bn)
    Petrochemical    US$9.6bn     (US$6.9bn)
    Mining           US$9.2bn     (US$1bn)

    Project finance countries IH 08 (IH 07 in brackets)

    US               US$19.1bn    (US$15.7bn)
    Australia        US$10bn      (US$9.7bn)
    UK               US$9.9bn     (US$12bn)
    India            US$9.7bn     (US$5bn)
    Spain            US$9.3bn     (US$3.8bn)

    Initial mandated lead arrangers IH 08 (IH 07 in brackets)

    RBS              US$9.2bn     (US$5.8bn)
    SBI Capital      US$6.9bn     (US$730m)
    BNP Paribas      US$6.9bn     (US$6bn)
    Calyon           US$5.5bn     (US$5.8bn)
    SMBC             US$4.7bn     (US$3.3bn)

For further information:

For further information: Rod Morrison, +44-20-7369-7570 or email

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