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The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments PowerPoint Presentation
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The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments

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The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments

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  1. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments Jubail November2000

  2. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments Introduction • Historical Perspective • The presentation tracks the development of the banking sector in Saudi Arabia and highlights the issues and future of Saudi Arabian regional and international banks in project finance • Market Evolution • Role of Saudi Arabian and International Banks • Issues and Trends • Conclusions

  3. The Role of Saudi Arabian Banks and International Banks in Financing Future Projects and Financing The Banking Sector in Saudi Arabia • History • Saudi Arabian Monetary Agency • Oil Boom • Five Year Development Plans • Infrastructure Development

  4. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments The Banking Sector in Saudi Arabia Selected Data 1995-1999 • 10 major banks • Assets over US$ 100 billion • Strong capital base

  5. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments The Role of Commercial Banks in Project Finance • The first and second round of SABIC Financings were primarily financed by equity and debt provided by PIF, SIDF and Commercial Banks • Straight forward, unsecured corporate loans • Entry of international banks in second round

  6. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments Recent Project Finance Deals • During the last three years more than US$ 5 billion raised from local, regional and international banks for Saudi Arabian Projects • Saudi Yanbu Petrochemical Company(Yanpet)- US$ 2,212 Million - 1997 • Saudi Chevron Petrochemical Company - US$ 305 Million - 1997 • Significant project financings in • Petrochemicals • Power • Telecommunications • Shoaiba Power Project (EWR) - US$ 800 Million - 1999 • Arabian Petrochemical Company (Petrokemya) - US$ 600 Million - 2000 • Emirates CMS Power Co. (Taweelah-A2)- US$ 596 Million - 1999

  7. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments Recent Project Finance Deals Saudi Yanbu Petrochemical Company(Yanpet)- US$ 2,212 Million - 1997 • The largest project financing transaction to be done in GCC by commercial banks • Yanpet established new parameters for Middle East project financings • IFR and Euromoney Middle East and North Africa Transaction of the Year and the Petrochemical Deal of Year • More than 30 Saudi Arabian, Regional and International Banks • Payment deferral mechanism • Long tenor

  8. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments Recent Project Finance Deals • Emirates CMS Power Company (Taweelah A2)- US$ 596 Million Facility - 1999 • Tenor • First IPP in GCC • Taweelah structure likely a template for the future • Increasing margin in later years • Off Take Agreements

  9. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments Recent Petrochemical Financings • Saudi Banks over the last ten years contributed approximately 50% of the capital required by SABIC projects. REGIONAL BANKS $ 1,000 Million INTERNATIONAL BANKS $ 2,100 Million SAUDI ARABIAN BANKS $ 2,700 Million

  10. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments Issues • Saudi Arabia needs substantial investment in infrastructure, industry, transport and communications to meet the demand of the growing population • Population Growth • Liquidity Position and Size of Saudi Arabian Banks • Incremental sources of funding

  11. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments Trends • Risk spectrum • Saudi Arabia and the Region needs substantial investment in infrastructure, industry, transport and communications to meet the demand of the growing population • Transaction Structure • Alternative sources of capital

  12. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments Conclusions • There are significant project financing opportunities in Saudi Arabia • Saudi Arabia needs substantial investment in infrastructure, industry, transport and communications to meet the demand of the growing population • Saudi Arabian, regional and international banks will continue to play a major role in project finance in Saudi Arabia • Risk and financing structures will change • Future financing requirements in Saudi Arabia will clearly exceed traditional capacity • Alternative sources of funding must be tapped

  13. The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments The Role of Saudi Arabian and International Banks in Financing Future Projects and Investments Jubail November2000