In a remarkable turnaround, energy ended up by far the most popular sector for global infrastructure investment in 2010, with more than $78 billion worth of deals and a market share in excess of 40 percent. This was despite the fact that, at the halfway mark of 2010, the transport sector held a small lead. By year end, transport accounted for $41.5 billion of deals and just over 21 percent of the market.
The energy sector total was given a big boost by Saudi Arabia’s $14 billion Jubail Refinery project, which reached financial close in October and featured an $8.5 billion debt package backed by the likes of the Export-Import Bank of Korea (KEXIM) and Japan Bank for International Cooperation (JBIC).
Other large energy deals to conclude in the second half of the year included the $3.2 billion stage II phase of the ERC Oil Refinery in Egypt – a project to develop, finance, construct and operate a new, state-of-the-art upgrading refinery facility. Financial close in August included $2.35 billion in senior debt. KEXIM and JBIC were also involved in this financing, along with the African Development Bank.
The popularity of energy has been underlined by a spate of recent fundraisings targeting the sector. In January, the Carlyle Group announced it was launching a mezzanine fund targeting the energy sector. In the same month, Texas-based energy specialist EnCap swept past its $2.5 billion fundraising target on its way to a $3.5 billion hard cap. In Europe, BNP Paribas Clean Energy Partners closed a €437 million fund targeting clean energy in December 2010.
Although transport had a quieter second half of 2010, some sizeable deals reached financial close. Among them were the €1.1 billion design, build, finance, operate and maintain project for a section of the A63 highway in France; and the $1.6 billion close of the Denver Transit Rail public-private partnership in the US.