Last year was the year when Japanese-headquartered banks wrested control of the global project finance market from the Europeans. The evidence from the first quarter of 2013 is that their grip will not be easily loosened.
As the above chart of top ten mandated lead arrangers shows, Sumitomo Mitsui Banking Corp (SMBC) led the way in the first quarter with involvement in almost $1.4 billion worth of transactions. Its 37 deals were widely spread geographically, encompassing the likes of Private Finance Initiative (PFI) deals in the UK (e.g., Wakefield Waste), energy transactions in Latin America (e.g., Cochrane power plant, Chile), and transport in Australia (e.g., Brookfield Rail financing).
In second place, hot on the heels of SMBC, came Mitsubishi UFJ Financial Group. Also totalling more than $1.4 billion of deals, Mitsubishi was just a whisker away from its Japanese rival. Among its first-quarter roster were the A1/A6 motorway project in the Netherlands and the Etihad Rail national railway project in the United Arab Emirates.
Mizuho also made its way into the top five, with its deals including the Cernambi Norte FPSO (floating production storage and offloading) unit in Brazil. The top five was rounded out by Italian-headquartered Unicredit and Intesa Sanpaolo, in third and fourth places respectively.
If 2012 was the year of Japan, it was also the year of energy. The traditionally neck-and-neck battle between energy and transport to be the most active sector in project finance became a one-horse-race last year as energy dominated. The first quarter of 2013 suggests that the pattern of history may be resumed with transport holding a slight lead thanks to deals such as the Brebemi motorway in Italy, the Gebze-Izmir highway in Turkey, and Luis Munoz Marin International Airport in Puerto Rico.
Although it’s not the first time that Western Europe has claimed top spot, our regional table is notable for the fact that five different regions all claimed a fairly equal share of project finance activity in the first quarter with Latin America, Asia Pacific and the Middle East all evidencing high levels of emerging market activity.