Posted on September 11, 2013

A proposal to create the International Infrastructure Investment Bank (IIIB) to be based in Doha was proposed at the ongoing MEED Qatar Banking Summit 2013. The concept is to establish, by 2015, a new specialist institution located in Doha and London with initial capital of not less than US$5 billion increasing over 5 years to US$15 billion thereby giving a balance sheet capacity of circa US$300 billion.

In his presentation entitled How the Global Infrastructure Bubble Provides a Significant Opportunity for Qatar’s Financial Sector, Anthony Holmes, co-founder and director of Institute for Infrastructure Studies, proposed the establishment of the IIIB which will be instrumental in arranging and participating in the funding of large scale, complex infrastructure projects globally.

“The IIIB’s mandate will be confined to financing the development phase (i.e. construction through to the commencement of operation) of major complex infrastructure projects globally. New thinking is required to address the projected global demand for infrastructure investment. We would like to emphasize that the demand for finance probably exceeds supply by a significant amount and, if current practices continue, the projected investment of US$50 trillion might increase to US$70 or US$ 80 trillion if the tendency for projects to exceed their original budget is allowed to persist,” Holmes added.

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Moreover, Holmes said the IIIB is envisioned to become the global centre of expertise in this substantial asset class and utilise its knowledge base and balance sheet to command a leading position in the syndicated financing of these major assets. “There can be no doubt that this is an asset class of importance to global social and economic development that has expanded beyond the capacity of the established institutions to address in a piecemeal manner,” he added.

In his presentation, Holmes said that the World Bank will continue to provide assistance to those countries that are developing but are devoid of sufficient economic resources to provide even the most basic infrastructure. Qatar finds itself in the unique position of being able to use its considerable investment in domestic infrastructure to dominate this asset class and to profit from the constraints and impediments likely to be experienced by established financial institutions.

The MEED Qatar Banking Summit 2013 continues today at the Renaissance Doha City Centre Hotel where the discussions will focus on capital markets and initiatives to develop Qatar as the leading financial hub.

The summit’s other highlights on its penultimate day include sessions assessing growth opportunities for Qatar’s private banking and wealth management sector; detailing global compliance issues and strategies to mitigate risks in the country’s financial market; and outlining opportunities in the trade finance and retail banking sectors.

The MEED Qatar Banking Summit 2013 is supported by the Qatar Central Bank, Qatar Financial Markets Authority and Qatar Financial Centre Regulatory Authority. For additional details, please visit www.qatarbankingsummit.com.

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