Islamic Banking is the Fastest-Growing Segment of World Finance

DUBLIN, Ireland–(BUSINESS WIRE)–Research and Markets (http://www.researchandmarkets.com/research/030380/islamic_project_fi) has announced the addition of the “Islamic Project Finance Report” report to their offering.

Islamic banking is the fastest-growing segment of world finance. Currently, there are 300 Islamic financial institutions in more than 70 countries. At the start of 2007, assets amounted to around $300 billion. By 2012 Islamic project financing could represent up to 30% of all major structured deals finalized in the region. MEED explores the extraordinary growth of this market, driven by local investors’ demand for Sharia compliant investment opportunities. Order this report and understand the key challenges and opportunities facing Islamic project finance over the coming years.

Executive Summary:

The value of Islamic project finance deals being closed in the GCC has been rising steadily over the past five years and is projected to grow to about $30,000 million in 2012, when it could represent up to 30 per cent of all major structured deals finalized in the region. The GCC economic boom, special factors in Saudi Arabia, increasing interest in sharia-compliant borrowing by major GCC corporates and the growing body of experts working in the Islamic project finance field will propel the market forward in the next five years. The Islamic project finance market is principally being developed by conventional banks and professional advisory firms. The role of Islamic banks in the sector so far has been limited, but this pattern is expected to change in the next five years as the number of sharia-compliant financial institutions grows and their appetite for long-term lending expands. Major challenges facing the Islamic project finance market are a shortage of qualified advisers specializing in Islamic project finance and of sharia scholars with expertise in Islamic project finance, the lack of predictability about the way GCC courts and particularly those in Saudi Arabia will deal with claims and disputes and the absence of established templates for completing major transactions. The Islamic project finance industry is expected to overcome these challenges within the next decade, laying the foundations for it to play a far greater role in structured finance markets in the wider Middle East, the Islamic world generally and, selectively, in non-Islamic markets where demand for project finance is pushing up against the limits of the appetite of the conventional sector.

CONTENTS:

Foreword

Executive summary

Introduction

GCC economic prospects 2008-12

The GCC projects market

The GCC project finance market

Islamic finance

Islamic project finance in practice

The rise of GCC Islamic project finance

Case study 1 The Petro-Rabigh deal

Case study 2 The Yansab transaction

Case study 3 Al-Waha Petrochemical Company

Appendices

Appendix 1 Major GCC project finance deals since 2004

Appendix 2 Directory of Islamic project finance specialists

Tables

Table 1 GCC sharia-compliant banks’ financial highlights, end-2006

Table 2 Middle East GDP, 1997-2006

Table 3 GCC GDP, 2003-07

Table 4 GCC current account 2003-07

Table 5 Value of major GCC projects by sector

Table 6 Expected trends in QP project finance closings, 2007-09

Table 7 Major sharia-compliant project finance deals closed, 2005-June 07

Charts

Chart 1 GCC projects: value as at August 2007

Chart 2 GCC projects: value, 2004-07

Chart 3 Value of GCC project finance deals, 2000-07

Chart 4 GCC project finance deals by country, 2006

Chart 5 Selected landmark Islamic project financings, 2001-07

Figures

Fig 1 Structure of an istisnaa

Fig 2 Structure of an ijara

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